Don’t Hold Your Breath for Rates to Drop

Since the beginning of 2022, the Federal Reserve has significantly raised interests rates to combat inflation, from 0.25% to 5.50%.

While this shocked the housing market, it has yet to have an effect on slowing down price growth, at least here in Chicago.

With prices in Chicago up ~7.4% in February 2024 compared with the previous year, many first time home buyers have simply given up home.

They are essentially waiting for rates to come back down at least 1.00% before getting back out there home shopping.

The problem is, lowering rates will simply increase home prices, so folks’ entire monthly payment will remain pretty consistent.

The Fed recently came out and said they might lower rates 0.75% to 1.00% sometime in the summer.

That is, if their inflation targets are hit, but I think we can all agree that reported inflation of ~3.2% is not the reality we are seeing in prices.

I simply don’t believe them - I saw a dozen eggs for $9.99 on Amazon last week.

If we see any decreases in the Fed Funds Rate, it won’t help with purchasing power like expected.

If you want to maintain your home price due to potentially lowering demand, give us a call because home staging is cheaper than your first price reduction.