12/11/2025
I continue to get a lot of questions from potential buyers and sellers trying to “time” the market perfectly. None of us have a crystal ball and know exactly what will happen. The best anyone can do is formulate an educated guess.
The big question…will rates drop in December? When we talk about mortgage rates, it is much more complex than oh the Federal Reserve dropped rates 1/4% like in yesterday’s meeting.
Just because the fed drops the “Fed Funds Rate” doesn’t mean other rates like mortgage rates follow. It is just a benchmark for other indices. More often than not, the secondary market/wholesale side of mortgage has already forecasted a change so what we see is a slight increase in rates if the Federal Reserve does only what is expected.
Just understand the media has this wrong and uses it to stir the pot.
I believe we truly don’t know the true picture of how the tarriffs are affecting the economy and are the main reason for increased inflation. We need to have a better understanding of the long term impacts. For this reason I’m surprised the Federal Reserve dropped the benchmark even 1/4% yesterday. We are still above the inflation target! It will likely keep rates steady for 2026 or make one small drop in March if I had to guess. 2026 will be much the same for real estate. Buyer and seller sentiment is stabilizing so the overall market will appear to be better, but I don’t see a lot of change this coming year other than normalization of the market and people finally understanding that the rates we have are historically good. As far as prices, I see 2026 as a year where prices will start to rise again ever so slightly through the normal process of supply and demand.
