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The spring homebuying season isn't what it used to be, thanks to the Fed

·1 min

Spring has traditionally been a popular time for selling homes. However, the Federal Reserve’s actions are causing difficulties for potential buyers. While rate cuts were expected to lower mortgage rates, inflation has increased, leaving the Fed with limited options. This has led to a pause in the spring homebuying season and may create challenges for the rest of the year. Higher rates are impacting housing inventory, as owners are reluctant to sell their homes with low monthly payments. First-time homebuyers are still purchasing homes despite rising rates. Home prices are increasing at a rapid pace, and the availability of new home construction in certain regions is providing some relief. The spring homebuying season is crucial for the housing market, accounting for a significant portion of annual sales. With the Fed unlikely to cut interest rates soon, mortgage rates are expected to remain high, further constraining housing inventory. Demand for mortgages is higher this spring compared to the previous year, which may put upward pressure on home prices. While there is a prediction that home prices may increase, the growth is not expected to exceed 2%. If mortgage rates decrease later in the year, there may be a boost in home sales. However, investors anticipate the first rate cut to come in November.