Presenting Our September 2024 Real Estate Spotlight: Lower Rates Propel Maine Higher

 

It seems like the perfect time for a Maine real estate update in the hours preceding one of the most anticipated FOMC meetings in recent years. Expectations are high that the economy has demonstrated sufficient weakness to allow a 25 to 50 basis point reduction in the federal funds interest rate. Regardless of the Federal Reserve’s action this afternoon, it seems that a rate cut or even several rate cuts are in our future.

 

The anticipation of more friendly interest rate policies has already had an effect on mortgage rates. The 30-year jumbo rate is currently 6.375%, down from 6.75% a month ago. Conforming mortgages (80% down below $766,550) have dipped below 6% for strong borrowers. There is little doubt that the dramatic increases in interest rates in recent years have had a material effect on both buyers, who have been priced out of the market, and sellers, who are hanging on to their 3% mortgages. As rates have come down, we anticipate a continued increase in active inventory along with a resurgence of buyer interest. We anticipate that buyer demand will, as history shows, react more quickly keeping prices firm to even higher levels.