(An Interview with local realtor Chase Rule with The Real Estate Company)
Dawson: Hey Chase, glad to have you today here at WBONTV to talk all things local Real Estate.
Chase Rule (Local Realtor) : Thank you for having me. I’m glad to be here and I am excited to inform local buyers on some important real estate tips for 2024.
Dawson: Well then, let’s dive right in. Tell me a little bit about dropping interest rates, and your take on how this might influence the housing market in Kentucky?
Chase Rule (Local Realtor) : Well, dropping interest rates can have a significant impact on the housing market. When interest rates decrease, it generally means that borrowing costs for homebuyers are lower. This often leads to increased affordability, as monthly mortgage payments become more manageable. As a result, we typically see heightened demand from buyers who may have been previously on the fence due to higher rates.
Dawson: Well, that makes sense. Do you anticipate this increased demand translating into higher home prices for the average buyer?
Chase Rule (Local Realtor) : Absolutely. When demand rises and there’s a limited supply of houses on the market, it’s natural for their prices to increase. This scenario can create a competitive market environment, with multiple buyers vying for the same property or properties, often resulting in bidding wars. This usually results in driving the prices up even higher!
Dawson: It sounds like home buying can really be a competitive process without the right help from a trusted realtor. On the flip side, how might these changes affect sellers?
Chase Rule (Local Realtor) : Sellers that are in a market with dropping interest rates can benefit as well. With more buyers entering the market and willing to pay higher prices, sellers may find themselves in a favorable position to sell their homes more quickly, potentially for a higher price than they would have in a higher interest rate selling environment.
Dawson: That’s great news for sellers. What about first-time homebuyers or those looking to upgrade into bigger homes?
Chase Rule (Local Realtor) : Lower interest rates can be particularly advantageous for first-time homebuyers or those looking to upsize to a larger home. With reduced borrowing costs, these buyers may find themselves able to afford more “house” for their money or secure a mortgage with more favorable terms, such as a lower monthly payment or a shorter loan term.
Dawson: It really sounds like lower interest rates can be a positive for all sides. Are there any potential downsides to lower interest rates in the housing market?
Chase Rule (Local Realtor) : Yes, sometimes there can be some drawbacks. One concern is the potential for increased competition among buyers, which can make it more challenging for some individuals to find and successfully purchase a home they like. Additionally, rapid price appreciation driven by high buyer demand can lead to affordability issues in the long run, especially if wages do not keep pace with rising housing costs.
Dawson: With the possibility of interest rate changes this year, how do you see this affecting the market overall?
Chase Rule (Local Realtor) : I would describe this like letting water out of a dam. You can do this slowly, or more rapidly. I believe the Federal Reserve will stick to their goal of a soft landing for our economy, so rates probably won’t decrease as fast as the rest of us want.
Dawson: So with that, what should the buyers and sellers on the sideline expect this year?
Chase Rule (Local Realtor) : First I would say keep in close communication with your realtor, because the tide can always change directions. Many economists believe if rates come down from 6.5% to 5% and under, this will cause a mass of people to jump back in with both inventory jumping, as well as upward buying pressure. I tend to agree with this, although I do not believe the Fed will cut 1.5% at the rate these analysts expect. Again, I would just encourage both buyers and sellers to stay informed and work closely with a knowledgeable real estate professional to navigate the evolving market conditions. It’s important to understand how changes in interest rates can impact your specific situation, and to also to make informed decisions based on your individual needs and goals.
Dawson: Excellent advice. Thank you again for joining us today Chase. Make sure to give your local realtor Chase Rule a call at 859-358-1048.
Chase Rule (Local Realtor) : My pleasure. Thank you for having me WBON!