Bucks County housing market to see more home sales with cut in interest rate
With mortgage rates falling, real estate agents expect the housing market in 2024 will rise with pent-up demand.
Location is a key factor in a home purchase and Bucks and Montgomery counties have attracted lots of potential buyers even when interest rates rose above 8%.
Now the National Association of Realtors reports that interest rates fell below 7% this month for the first time since August and that the Federal Reserve anticipates it will reduce rates three times in 2024.
“The momentum is moving in the right direction for stronger sales activity in 2024,” Jessica Lautz, NAR's deputy chief economist, said in a NAR announcement. “Will it be a traditional spring real estate market, or will it start to heat up in the winter months as rates decline?"
On Dec. 21, Lautz issued a bulletin showing that mortgage interest rates dropped to 6.67% from 6.95% the week before.
"For a $400,000 home, this is a monthly mortgage payment of $2,059—a monthly savings of $242 from when rates were at 7.79% in October. Mortgage interest rates for the 30-year fixed are also nearly a full percentage below the historical average since 1971 of 7.74%, she stated.
Bucks County Association of Realtors President Stephanie Garomon anticipates the market will start early and stay strong.
The market here "is really holding its own, very resilient," she said. "It's wonderful for sellers. There are buyers out there. With interest rates dropping, it's only going to get stronger."
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Bucks County attractive to home buyers
"Bucks County is on the map," she said, pointing out all the travel and other magazines that feature this location, close to both Philadelphia and New York as well as Princeton and the New Jersey beaches.
"It makes it appealing," she said.
The BCAR recently released its most recent market review from November showing that the median sold price for residential properties in Bucks County reached $441,000, a 1.5% decrease compared to October but a 3.8% increase from November 2022.
But the number of new pending sales decreased by 14.7% from October and the active supply of housing units dropped as well by almost 9%. Low inventory has been an issue in Bucks County throughout 2023.
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Busy real estate housing market ahead in 2024 for Bucks County?
With lower rates, realty firms expect more sellers will decide to make a move and become buyers themselves and the inventory of homes for sale will rise.
At Long & Foster Real Estate in Doylestown, Broker Joanna Bellinger said that so many people who had refinanced when interest rates were below 3% a few years ago decided to stay in their homes because they couldn't make a move when rates rose to 8% this year, but now they may decide it's the right time because their current house is too small or not the best suited for them.
"Now when they see the high 6s, they don't seem so bad —we've already been to 8," she said.
From the NAR analyses she's seen, 2024 will be a busy real estate year, especially in the third and fourth quarters when more interest rate cuts are expected.
But sales are still happening now in attractive neighborhoods. Her office handled two sales in Upper Dublin in Montgomery County right before Christmas and the entire Philadelphia region is one of 10 in the country in high demand, she said.
And the fact that it's going to be a presidential election year will help keep mortgage rates on the decline, she expects.
"They don't usually raise rates in an election year," Bellinger said.
More: Here are the most expensive houses sold in Bucks County in 2023
This article originally appeared on Bucks County Courier Times: Lower interest rates may spur Bucks County housing inventory
