Where do you see things going this winter in the market?

[Tyler Lingle]

Recently, I ran into this infographic. Very interesting predictions from Fannie, Wells and the MBA. If the forecasts are accurate, we are around the corner from another hot market with rates set to drop almost two percent!

My question is, where do you see interest rates going & why? What do you see happening in the real estate market over this winter? 

[Marcus Auerbach]

I follow these forecasts monthly (and talk about them on my YouTube channel) and in hindsight when you look into the details the rational they were based on is probably still correct, but the timeline was too optimistic. Now they all follow the "higher for longer" lead from the FED. The MBA has always been and still is the most optimistic, but even they push sub 6% rates out to the end of 2024. I think there is a possibility that we all get suprised and this happens faster than we think, especially with the news we have seen in the last few days from the labor market and the manufacturing index. Forecasting interest rates has always been next to impossible, but I think there is a chance that the 8% range is behind us for good. Noteworthy that ven with 7-8% rates our market in Milwaukee has sustained over 100% sales to list price ratios all the way through November, which is remarable and underlines buyer motivation. We probably will not see sub 4% come back ever again. But even with rates around 5% we will see a run on the market and buyers will push up prices significantly, especially if it happens during the spring market. Just hard to say if this could be in 2024 or in 2025.