September 2023 Market Update

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September 2023 Market Update

Sep 28, 2023

If you're a home buyer in 2023, and you're frustrated about understanding what is happening with interest rates. When are they going to drop? Then, this market update is for you.

Think of interest rates and inflation as nearly being tied together right now at this point. If interest rates are in control, then inflation has to follow it. If inflation is in control, then interest rates follow it subsequently.

Right now, 'inflation has been in control', meaning the economy is moving very quickly. Interest rates will always follow that. So we want inflation to slow down, so interest rates stop rising. So what can the government do about this? They can raise interest rates faster than inflation. So now interest rates are in control and the government is in control. This means that as it rises, eventually the economy will not be able to keep up because it's too expensive to borrow money, so people will stop buying goods and services. When that happens, all of a sudden inflation drops, and interest rates can now go lower to where they are today.

Here's the problem with that,

Despite the government raising these interest rates, inflation has just continued to rise. In fact, the government just recently said this past month, 'we're not going to raise interest rates anymore'. The problem is that inflation has not decreased by much in recent months. The only good news that we have on the horizon is that unemployment started to increase which means that the economy may be slowing just slightly. This 'good news' and other reports, the government did decide to pause raising interest rates for a little while. So if you've been looking to secure a mortgage, right now may be a good time to reach out, just to see where interest rates are at with your budget.

National Association of Realtors just put out stats

Around 27% of all homes that were purchased were first-time home buyers which goes exactly with what we've been saying for the past few months that Millennials are a massive part of this home buying process, with about one- third of all purchases being FIRST- TIME HOME BUYERS.

What does this mean for the home-buying industry?

Number one; first-time home buyers are on the rise right now. Nearly 30% of all transactions are first-time buyers which simply means this, people are still looking at renting and saying, you know what? It's not as great of an option. If I'm going to have home appreciation by owning my own home, I'm going to be able to put equity in my pocket every single month and it's still a great option.

In fact, this also goes along exactly with what we've been saying in recent months Millennials are a huge portion of all these first-time homebuyers.

The second one is all about CASH BUYERS. Also, nearly 30 percent of all transactions right now are cash buyers. How is this happening? Well, people who own homes have recently seen an enormous amount of equity being into their property because of home appreciation. That means that when they sell the property, they're left with a huge stack of cash that they can then use to put into their new home rather than investing it in a volatile stock market.

If information like this is helpful to you, in your home buying or home selling process, whether either now, or into next year, please go ahead and just reply in the comments to your agent on Brooke Team, they'd be happy to help you and set up a time in order to chat.

Here are September Stats