Future rate cuts are uncertain, so you better lock in today’s lower rates.

What should we expect from the real estate market for the last quarter of the year? The end of summer is near, and we’re seeing some exciting developments in the housing market and mortgages. A recent conversation with Matt Stancato from Guild Mortgage revealed some interesting insights about what to expect for the coming months.

As we move into the fourth quarter, one question remains: What's going on with interest rates? Before the Federal Reserve made a half-point rate cut in September, rates were relatively stagnant with slight fluctuations. 

On the day of the rate drop, mortgage rates didn’t go down as much; instead, they slightly increased, which was not what most people expected. This is because of the phenomenon called “buying the rumor and selling the news.” Financial experts will try to make the most of this anticipated price drop by buying financial instruments like mortgage-backed securities in the secondary market before the official rate drop announcement.

“As of now, rates are about as low as they’re going to get.”

When lenders and mortgage companies knew that rates would be reduced, they started lowering mortgage rates about two to three weeks before the Fed made its move. This resulted in a significant drop from 7.75% to 6.5%, showing how quickly the market can shift when news is on the way.

Interestingly, when the Fed announced plans to make two more rate cuts by the end of the year, either for a quarter and a quarter or for a half and a quarter, the market wasn’t reacting the same way as before the first cut. Why? Because the upcoming election adds an element of uncertainty. We don’t know how the market will react during or after the election season. That’s why even though the Fed says they will further reduce their rates, unexpected events during the election could prevent them from doing so.

Because of that, rates are at a temporary trough for the next few years. They are definitely headed down at least another 1% to 2%. As of now, rates are about as low as they’re going to get. That’s why if you’re thinking about locking in, making an offer on a property, or refinancing, now is the time.

With about a month until the election, we’re eager to continue working with buyers and sellers. In fact, we have five new listings coming up, which excites us about what the rest of the year will bring. This year has been the most interesting so far in the real estate market.

I’m also excited to invite you to the upcoming Stein Team and Guild Mortgage Annual Pie Party, which will be held on Thursday before Thanksgiving. We’ll have fresh-baked pies from Uri's Bakery, and it’s always a fantastic event. We love giving back to the community, so please consider donating a coat to the women’s and children’s shelter in Coatesville.

If you have any questions, feel free to call or text us at (610) 549-4435 or send an email to homes@steinrealtygroup.com. We look forward to connecting with you.