The Pittsburgh real estate market is finally shifting towards buyers. Since the COVID-19 pandemic and the onset of inflation, the real estate market has firmly been in the seller's camp. Sellers took advantage of strong demand and record-high home prices.
According to CBS News, Pittsburgh now features a neutral market. Buyers can no longer get away with super high list prices. The average days needed to sell is now closer to 90, which indicates a neutral market.
Read on to learn how mortgage rates will affect the Pittsburgh real estate market. Explore topics such as interest rate comparison and home loan trends.
What Are the Current Interest Rates?
Interest rates remain near 7% for a 30-year mortgage. Many people thought that U.S. Federal Reserve policy could help lower interest rates. However, this did not occur in spite of the Fed lowering its benchmark rate over the past few months.
A few strategies can help borrowers lower their mortgage rates. The easiest way is to take out a mortgage with a shorter repayment term. A 10-year mortgage has a significantly lower rate than a 30-year one.
Another option is to consider fixed vs. variable rates. Variable rates change depending on market conditions.
If rates decrease in the future, you may receive relief on your monthly payment. However, there is a risk that rates will go up and your payment increases with it.
Lastly, you can pay points at closing to secure a lower rate. This means you pay a portion of the interest upfront to save over the life of the loan. The best advice is to have market professionals help you select the right strategy.
What Is the Mortgage Rate Forecast?
Many real estate experts do not see any relief in the short term. The next Fed meeting is not happening until January, so buyers will need to wait at least a few months for impactful changes.
The truth is that mortgage rates are not historically high. Before the 2000s, it was typical for mortgage rates to be over 7%. In the early 1980s, you had to pay an 18% rate on a 30-year mortgage.
In response to the Great Recession in 2007, the Fed began a quantitative easing policy in which they brought the benchmark rate to essentially zero. The goal was to inject liquidity into the economy and make it easier for consumers to borrow.
This policy led to a decade-plus period of mortgage rates below 5%. The Covid-19 pandemic and the resulting hyperinflation brought this period to an end.
Mortgage rates have since returned to their historical average. Barring some significant intervention by the government, mortgage rates appear here to stay. Home buyers should not base their decisions on the hope of a major rate shift.
Your Guide to Mortgage Rates
You now have a firm understanding of interest rates in the real estate sector. Like any major purchase, you should perform interest rate comparison with different lenders in the area.
The Burgh Property Management has been helping its clients navigate the real estate market for more than two decades. If you need help with mortgage rates, contact us at The Burgh Property Management to speak with an expert.
