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Interest rate cuts may impact Austin
After months of speculation, the Federal Reserve cut interest rates last week. Federal Reserve Chair Jerome Powell also announced there are plans for more cuts later this year, and into next year.
AUSTIN, Texas - After months of speculation, the Federal Reserve cut interest rates last week. It is the first such move since 2020.
Federal Reserve Chair Jerome Powell also announced there are plans for more cuts later this year, and into next year.
"Inflation is cooling. The Fed recognizes that it is. So the rates have dropped in order to make borrowing a little bit more attractive again," said Olivia Vale, an Austin-based realtor with Roots Residential Group.
So what does that mean for the real estate market in the Austin area? Vale shared some insight with us.
"It means different things now this fall than it will mean in the spring. So right now is a great time for buyers. The spring will be a great time for sellers," said Vale.
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Here in Central Texas, things have been improving for home buyers ever since prices peaked in 2022. In the short term, they should get even better.
"So the buyers that are getting in the market right now, probably the best time is now, this fall, because you can get a home at a low price. Then you can refinance down the road when rates are solidly low and a lot of local lenders will even give you a free refinance," said Vale.
If you're looking to sell, Vale says hold off if you can.
"Unless you have to sell right now, it does make sense to wait for spring 2025, when there will be more buyers on the market and more people bidding for your home. And that puts you in a great position," said Vale.
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And with several more cuts on the way, it's left many wondering where mortgage rates will ultimately land.
"We'll probably end up in the fours, fives, that kind of thing. It may take a year. It may take a year and a half," said Vale.
And with inflation easing up, Vale says you can expect more or less a return to normal when it comes to home prices.
"Prices went up about 40% during the pandemic. They came down about 15%. So they're going to normalize now and go back to the, you know, 5 to 10% increase," said Vale.
Vale points out that mortgage rates don't exactly move in tandem with interest rates. Many mortgage companies anticipated the move from the Fed, and already factored in the interest rate cut.