In the February 2024 issue of COPS Magazine, (page 79), I wrote an article about some misinformation and what to expect in 2024. One of the topics was people thought that “the values of homes HAVE TO come down.” I wrote that home values will continue to rise due to manty factors including inventory. Inventory will stay low. Even though CNBC came out 2 days ago and said inventory is up, it is still 2 months lower than pre-pandemic numbers. Also, though they reported the median price being down slightly, if you look at the median sq. foot costs, prices are rising significantly. The average home is up over 6.5% year to date.
I also wrote that rates will slowly start to come down in 2024, they have. They were as high as 8% in October of 2023 and now are cracking into the high 6’s. I see this trend to continue as inflation is coming down, the jobs market is softening, and the economy’s growth has moderated.
What to expect in the second half. If the data continues, expect the Fed to cut rates in September and November. “Hey Jeff, does that mean rates come down that day?” NO. Rates are affected by many things I won’t bore you with today, but it will certainly help and help your credit card rates. Expect inventory to stay tight. For all the reasons I stated in January. New housing starts continuing to be slower, new housing permits are down, as the rates go down there will be more buyers looking to purchase. More buyers chasing the same supply means prices will continue to rise.
Inflation? I expect that the rise in inflation will continue to come down. Rents and car prices/insurance play a huge roll in the Feds calculation of inflation. Rents are coming down as are the prices of cars, so expect good inflation news as we close out the year. Reminder, that doesn’t mean prices will return to the old days. Some will but most won’t keep increasing.
Housing debt and refinancing – Housing debt will continue to rise as people are using their credit cards to pay for things due to inflation, and maybe a little gluttony. With equity at a historic high in homes, more people are refinancing than in the last two years. Refinance applications make up over 31% of all new applications. Don’t let your ego and low first mortgage interest rate make you suffer. All of my refinance clients have low mortgage rates, but when you can save $700, $900 or like my newest client $1,436 PER MONTH. That is life changing. Stop working overtime and spend quality time with your family.
The second half of 2024 should feel a bit more positive than the last year or so. I expect inflation to stay under control and home prices continue to rise. The election will surely impact the economic landscape here in our great country. Feel free to reach out to me if you would like more economic information.
– Jeff Rosen – Lending To Heroes
