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32: Current Buyer's Mindset - When Will Rates Finally Come Down and What Will Lower Rates Mean for Buyer Competition?
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"What will mortgage rates be in 12 months?" asks the person holding the magic 8 ball.
The person shakes the magic 8 ball and waits for the answer. "Come back in 12 months and I'll let you know then"...even magic 8 balls don't know what is going to happen to mortgage rates in the future!
Experts will make their predictions based off of decisions made by the Fed, CPI, if bonds are being bought and sold, and so many additional variables. The truth is, no one TRULY knows what the future holds.
But I do think there is a pretty solid answer for what will happen once rates do come down. Remember what was happening to the housing market in 2021 and 2022? Absolute chaos! Homes were being bought for $50-$100k over list price, appraisals were being waived, and inspections were being negotiated completely out of the buying process. People were buying homes without a shred of leverage because it was so cheap to borrow money to buy that home. I don't think we will see another market quite like that, but how many more buyers will be able to qualify for a home loan once rates go back below 5%? Certainly more than the number of buyers that are currently looking. And the chances of there being more inventory for those buyers to choose from is, well...extremely low.
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