Midterm elections often mean hotly contested races for seats in the House and Senate and polarizing issues that sweep the country. Though this year’s midterm elections were no exception to the norm, they did offer one unusual result – mortgage interest rates have corrected a bit since November 8th, 2022. After topping 7% in recent weeks, rates for a 30-year-fixed-rate mortgage dropped to 6.9%. That’s a decline of 39 basis points, a significant change from the previous week!
While interest rates are creeping up again as of writing, it’s important to understand that interest rates respond to a variety of economic factors. The Federal Reserve is responsible for setting the standard interest rate, which they’ve been steadily increasing over the course of the year to try to curb rampant inflation in the US economy. The Fed raised the standard interest rate again on November 2nd to a “target range of 3.75%-4%, the highest level since January 2008.” With the latest economic data available in the October inflation report, we could see the Fed raise interest rates one more time before the year is through! Although there isn’t a direct correlation between the standard interest rate and mortgage interest rates, when the Fed raises rates, mortgage rates tend to rise as well.
What does all this mean for the Long Island housing market? Some buyers are seeking to use the recent drop in interest rates to their advantage and scrambling to lock in a great rate now. That means buyers who may have been sitting on the sidelines the last few months are back out and touring homes on Long Island.
As a seller or prospective seller, having your home on the market during the holidays this year may work to your advantage. Buyers who spend time looking at properties in between holiday parties and family dinner are generally very serious. If they find the right home, they’re usually ready to put in a solid offer and move forward in the purchase process. Sometimes these buyers have to move because of a job relocation or upcoming family changes, but others just want to take advantage of current market conditions.
If you had plans to make a move in 2023, you may want to consider moving up your home purchase or sale. While home prices have corrected somewhat over recent months, median home sale prices in most Long Island neighborhoods still sit at year-over-year highs! Listing your home now means you have the opportunity to get the most money possible for your home. Home values aren’t expected to appreciate significantly in 2023, so there may not be an advantage to waiting.
Similarly, if buying a Long Island home is on your mind, buying over the holidays can be a great choice. There’s less competition from other buyers and sellers are generally open to negotiating in order to go under contract and close before the end of the year. Some sellers are feeling the sting of being on the market longer than they planned, which can make them very amenable to working with a buyer who makes a strong, fair offer.
Buying or selling a home during the holidays can be a bit more challenging with all of the holiday business closures that can affect inspections, repairs, and closing timelines, but we have the proven experience, skills, and tenacity to see you through to the closing table. We’ve successfully put buyers and sellers under contract at all times of the year and our team is ready to work with you now! If you’ve had any thoughts of making a move in the next six months, reach out to us today to discuss your plans. We’ll help you decide if it makes sense to make a move now or wait until the New Year.