The Federal Reserve recently held a meeting where they raised the federal funds rate by 25 basis points, or 0.25%. While this isn't good news, the one positive thing is that most banks anticipated an increase of about 50 basis points, or half of a full percent. So when the meeting happened and they only raised it 25 basis points, that's actually kind of a reason for a celebration. We saw interest rates drop after this meeting because we expected worse news.
The banks make assumptions and bake those assumptions into the rate prior. So the rates probably went up two or three weeks ago because they knew at this meeting, or they thought at this meeting, that the Federal Reserve was going to raise the federal funds rate. Mortgage rates went down because banks thought it was going to go up more.
What about the real estate market? How has this had an impact? We're going to focus on New England. We have seen crazy increases in inventory, the number of homes for sale, in the last three weeks in a row. Believe it or not, going back the last three weeks, every single week we have had the highest amount of new homes for sale, the highest new homes for sale, in both New Hampshire and Massachusetts, and really New England as a whole.
Part of this is really normal; part of this is seasonality as we get out of winter and into spring. When people are thinking about moving and want to move, they're going to list their homes for sale more. If you're buying a home, this is great news. You get more options, maybe slightly less competition, and rates went down a little bit.
Now, they've gone back up since the time of making this video, but you can't control the rates; you can just control what you can control. So what I'm going to tell you as a buyer is home sales or inventory, I should say, are following the trends that we expect as we move through spring and into summer. More inventory will come, and with that, more options will be less competition.
The next thing to focus on is home sellers. If you're a home seller, you didn't miss it. It's not too late, and you still have a massive opportunity. However, as inventory picks up, it's still a seller's market, and that's not changing anytime soon. However, who you work with is even more important. How you market your home, how you price your home, what strategies you use, and how good of a negotiator your agent is - those things matter more than ever when there's more competition.
In summary, the Federal Reserve raised rates, but not by as much as we expected. The real estate market is following the normal trends of more inventory as we move into spring and summer, making it a great time for buyers. Home sellers still have a massive opportunity, but it's important to work with an experienced agent who can help you navigate the competition.