An Instant Reaction to the Fed’s Decision to Not Lower Rates in March 2024
RATES ARE STILL NOT DROPPING.
You might not think this indicates a real estate boom on the horizon… but I do.
Younger generations are approaching the housing market cautiously, understandably way given the current landscape. The Fed has decided not to drop rates, again, continuing a months-long streak of rates in the 6% range. With mortgage rates at consistently high levels, the prospect of homeownership seems more elusive than ever before, especially for Millennials and Gen Z, who make up about a quarter of homeowners and have watched the median age of purchasing tick ever upward.
Source: Redfin
This gun-shy behavior on purchasing extends beyond just the younger demographic – it’s a market-wide standoff characterized by hesitation. Homeowners who secured mortgages at historically low rates are understandably reluctant to relinquish their valuable properties. Similarly, Baby Boomers, comfortably settled in mortgage-free homes, see little incentive to relocate.
Source: National Association of Realtors
This trifecta of high rates, low inventory from previous record-low rates, and Boomers’ holding pattern will one day break. There is reason for optimism on the horizon. Millennials and Gen Z are patiently waiting for the right conditions to materialize. As older generations eventually vacate long-held properties to downsize and interest rate moderate, I for one anticipate a surge of activity that will redefine the real estate landscape.
Cassandra Mathes is a licensed Realtor at Marketplace Homes with over a decade of experience in new construction real estate transactions.