As you probably know, the Fed had a meeting this week, and it is still being determined if we will see a rate cut in 2024. It sounds possible, but whether it’s in September or later in the year is unknown. It seems unlikely that if there is a rate cut, it will be meaningful. None-the-less any rate cuts will be welcome news to both buyers and sellers.
As I’ve communicated before, the Fed rates are different from mortgage interest rates, but of course, they do coordinate. Mortgage rates tend to go up and down based on many factors, and the Fed’s decisions do influence rates. Today, we saw mortgage rates decline a bit, and they have been down significantly since last fall.
Inflation rates – both general and “core” readings – just dropped to their lowest points in over 3 years (though still above the Fed’s target rate of 2%)
The stock market also continues to do well, and a healthy stock market is directly correlated to a healthy housing market in SF since so many Bay Area residents tend to hold large positions in stocks.
The Fall market will likely be steady with some wild cards in there due to some uncertainty around who is even in the election, but presumably, we will have our presidential candidates sorted out prior to September.
What I feel on the ground in SF is good demand and very little inventory, and despite it being summer and having fewer buyers and sellers on the ground, the offers that we are writing are mostly competitive situations.
As of early July, mortgage rates continue to hover around 7%, though hopes remain for at least one reduction in the Fed’s benchmark rate in 2024. Stock markets have sustained their extraordinary rise. The homeowner’s insurance situation remains challenging, with policies often difficult to locate and increasingly expensive. And the latest Census estimates revealed the Bay Area is growing older, with fewer children and a rising number of residents aged 65+.
