The recent Federal Reserve rate cut of 0.5% on September 18, 2024, is likely to push mortgage rates below the critical 6% mark, making it an appealing time to buy in Santa Fe, New Mexico. With the median home price around $587,000, buyers could see lower monthly payments due to the reduced borrowing costs.
Short-Term Outlook
Over the next few weeks, the cut will likely increase buyer demand as more people rush to take advantage of lower rates. However, this demand could push home prices higher, particularly in competitive markets like Santa Fe, where limited inventory has already made it a seller’s market.
What Happens Next?
The Fed is likely to implement smaller rate cuts over the coming months, with another cut possible in November 2024 (Kiplinger.com). If the Fed continues cutting rates, we can expect mortgage affordability to improve further, driving up housing demand and potentially fueling price increases. On the other hand, if they hold rates steady, buyer enthusiasm could plateau, keeping prices more stable.
Is it a Good Time to Buy?
For prospective buyers in Santa Fe, now may be a favorable time to lock in lower mortgage rates before home prices react to increased demand. The competition for homes is expected to intensify, so moving quickly could save money on both the property price and long-term interest payments.
Potential Risks
While lower rates are tempting, remember that Santa Fe’s market is already tight. If the Fed continues to cut rates, prices could surge faster than expected, eroding affordability gains from lower mortgage costs. Conversely, if rates hold steady or rise again, the market could stabilize, offering more time for careful decision-making.
In conclusion, the current market conditions in Santa Fe present a good opportunity for buyers, but acting sooner rather than later could be the key to securing a more affordable home. For expert guidance, contact one of our agents at Valdez and Associates, where local market insights can help you navigate this dynamic real estate landscape.
