Inflation is reported to be decreasing, which is excellent news. Due to the efforts of the Federal Reserve to control inflation by continuously raising benchmark interest rates, mortgage loan interest rates had also been increasing. It had reached almost 8% last month.
However, in October, inflation was reported to be 3.2% year-over-year, showing a significant improvement compared to the 3.7% in September. It seems that prices are gradually stabilizing.
As I have mentioned several times, when mortgage interest rates decrease, sellers tend to put more homes on the market, providing buyers with more options. Nevertheless, the impact of lower mortgage interest rates on the market dynamics is uncertain. Currently, for home prices to stabilize, the number of new listings (supply) would need to be at least six times more than the number of new buyers.
In the current situation, this seems a bit challenging. Despite a decrease in the number of sellers and buyers over the past 1-2 years, home prices have continued to rise.
On a side note, it's important to note that while the decrease in inflation is positive, celebrating it too soon might not be appropriate. The Federal Reserve's target for inflation is 2%, and with the current rate at 3.2%, there is still a long way to go. Therefore, even if mortgage interest rates decrease, it is likely to happen gradually.
If you have any questions about today's information, please feel free to contact me anytime. I will strive to provide even better content next time.
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