A Gen-Z's Guide to Life and Real Estate

As there was at the end of 2022, there is a lot of talk going around right now about the Fed dropping rates throughout this next year. Of course, throughout 2023, we did see a slight drop in January, before the rise and rise that we saw throughout the rest of the year before things started to drop off in Q4 2023. There will always be speculation in the rate environment, but will rates actually drop in 2024?

I don’t know…

That is certainly a better question for your lender or favorite economist, but I can tell you what you might expect in the Dane County market should continual rate drops happen this next year.

Sellers/Listings

You only had to talk to a few homeowners in 2023 before you ran into a few who spoke about their desire to move onto their next home but were conflicted about backing out of their low rate. This certainly strangled inventory over the year, with many sellers only doing so to downsize, relocate, or dramatically up-size. Who wants to back out of an absurdly low payment? Assuming that rates drop in 2024, one can expect sellers who were on the fence in 2023 to make a leap to list their homes, thus bringing more inventory to the market.

Buyers

That is great for buyers, right?

There are always two sides to the coin. While an influx of inventory would bring more options to the table for prospective buyers, the lower interest rates would likely bring more buyers into the market. In 2023, we saw the number of listings with competing offers jump to over 50% at the year’s peak. This is with fewer buyers and sellers due to interest rates. If we brought more listings and buyers, well, it would probably bring a comparable situation competition-wise.

I don’t think interest rate drops would bring too many changes to our market. The number of listings year over year would improve and hopefully level out demand. However, with the region’s growth, it is still possible to expect the continuation of our hyper-competitive market that we have grown used to over the past few years.

It is never too soon to start planning your home-buying or home-selling goals. There are so many conversations to be had and resources to explore. Feel free to reach out if you need to talk through anything or if you need help finding resources for your journey.