Snip, snap, snip, snap.

Interest rates have been fluttering back and forth between 6-7% for two years now. This makes me think of what the great contemporary philosopher Michael Scott once said:  “Snip, snap, snip, snap”.

For many real estate professionals and hopeful home buyers and sellers, it has felt like we have been stuck in 2022 for the last 2 years.

Some real estate markets have seen a correction since the pandemic boom.

Austin, Texas has had the largest drop in home prices, a staggering decline of 18.5% since the peak of the market in June of 2022.

The market with the second largest drop is New Orleans, lowering by 13.4%.

A handful of other metros have depreciated by roughly 5% such as San Antonio, Portland, Denver, Salt Lake City, Phoenix, and San Francisco.

These are the exceptions.

The US housing market is up 2.2% since the peak in mid-2022.

Some markets have seen significant growth such as Hartford, CT with a 14.8% in value, Milwaukee, WI by 10.4%. Plenty of other metro areas have increased by 5-9%.

We all know that buying and selling homes isn’t a day trading game. If your metro has dipped in pricing, don’t fret. Stay in for the long haul.

Real estate continues to be the most stable asset class available to buy for the common person.

These dips in home values are minor relative to the 44.1% appreciation we’ve experienced in our country since March of 2020.

Where are mortgage rates headed for the rest of the year?

The truth is, we cannot predict the future. We can, however, use our current trends to predict and prepare for the best and worst case scenarios.

The National Association of Realtors is predicting that we will see 30 year fixed rate mortgages to hit 6.4% by Q4. Wells Fargo predicts that we’ll be at 6%, the Mortgage Bankers Association has a forecast of 6.1%. Fannie Mae, the largest lender in the US, is predicting the average will be 7% by the end of the year.

Much of these rates will depend on what the inflation data shows us.

The CPI, a broad inflation gauge that measures a basket of goods and services costs across the U.S. economy, has increased 3.3% from a year ago. This is far better than the 7% CPI data we saw in 2021, and much closer to the Fed's ideal sustainable growth target of 2%.

My prediction is that current interest rates are the peak. What are your thoughts?