BATON ROUGE, La. (WAFB) – The Federal Reserve’s interest rate cuts have caused little change in the housing market, according to experts.
“What’s interesting is that most people expect mortgage rates to go down if the Federal Reserve cuts rates,” said Fred Dent, CFA and principal at Dent Wealth Advisors. “What actually happened was that mortgage rates went down in anticipation of the cut, and then once the cut was announced, mortgage rates went up a little bit.”
Brandon Richoux has been a real estate agent in the Baton Rouge area for the past 11 years. He explained that the real estate company he runs, Smart Move, has not seen an increase in the number of prospective buyers since the interest rate cut.
“All of our real estate agents were really hoping that the news of the rate cut would be a catalyst for some buyers to come to the market. We haven’t really seen that yet in our office,” Richeux said. said.
Richeux told WAFB he frequently looks at trends and analysis. He determined that while the election will be held in the fall, when home sales are seasonally low, homes will be easier to buy but harder to sell.
“We are really experiencing a change in the market, with more inventory and more homes for sale than ever before,” Richeux said.
Dent doesn’t think mortgage rates will fall any further anytime soon.
“What a lot of people forget is that the average mortgage rate this century was 5%,” Dent said. “But people these days have become spoiled with 2% to 3%. So at 6.4 years it still seems high. It would take the economy to be very weak for interest rates to come down any further. I think so.”
With recent news that 245,000 jobs were added in September, there is little sign of the economy weakening at this point.
“If you’re thinking of buying a home now, don’t expect mortgage rates to fall until you see the economy soften,” Dent said. “It doesn’t look like the economy is going to soften anytime soon. The labor market is strong, the economic indicators are strong, and that’s just not happening right now.”
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