Last week Tim and I discussed several proposals from Whitehouse.gov on how the Biden Administration plans on bolstering the housing market. It is not clear what has passed and what was only proposed but honestly nothing proposed looks like it would have much effect.
There is a catch 22 with interest rates. First of all they are not set by the actual Federal Government so there is that but most people understand that the Govt can pressure the Fed at times and right now it looks like nothing is going to change.
The catch 22 (according to the Fed) is that if you lower rates you increase inflation and the cost of eggs and automobiles goes up even faster. But if the cost of a car went up 5k and you could get a 2% interest rate, the payment would be lower and it would feel cheaper. It’s a vicious cycle and it’s basically what happened to housing from 2018-2022.
* This is not a political knock on Biden Administration vs Trump BTW I have no idea what Trump proposes, this is only our analysis of what the Govt has proposed publicly.
So if rates go down, houses go up even faster and round and round we go. What will ACTUALLY help? We discuss our ideas at length with several proposals from restructuring existing loan programs to incentivizing the building of affordable homes.
If you are considering buying or selling this year let me be frank, the buyers are still struggling because of affordability and sellers are still getting the upper hand. Houses are sitting a tad longer on the market but are still selling if priced correctly.
Housing prices have increased 5.9% in the state of Maryland in 2024 and no one is expecting them to crash anytime soon. It’s better to lock in the price and ride the equity until we get a break on interest rates. As prices continue to increase, at lease you are locked in.
BTW That’s the same advice people have been ignoring for the past 5 years, how has that worked out???
