The State of RI’s Real Estate Market - Prices, Inventory and Interest Rates
Thursday, May 02, 2024
Those looking to buy a home received no good news from the chairman of the Federal Reserve on Wednesday. The Fed voted to hold rates, which means that the heavy borrowing costs for homebuyers will continue.
Interest rates for a 30-year mortgage are now over 7%.
Fed Chairman Jerome Powell said that if inflation proves “more persistent than expected and…is moving sideways,” then the Fed would hold off on rate cuts, as opposed to raising rates.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTPowell also said, “Of course, we’re not satisfied with 3% inflation,” he said. “Three percent’ can’t be in a sentence with ‘satisfied.’”
“Until inflation kind of gets out of control, and Mr Jerome Powell feels confident, we could be hovering around that 7% interest rate for quite a long time,” said Ben Scungio of Mott & Chace Sotheby’s International.
Value and Return on Investment
However, for buyers who want or need to purchase a home, the cost continues to climb.
Simultaneously, the value of homes continues an upward trajectory.
“If you look back, if you purchased your home around 2015 or 2016, you could have just moved right in there with your toothbrush, done nothing, and your home probably has doubled in value, depending on where you are in the state of Rhode Island,” added Scungio. “That's far better than anything you can do in the stock market, in my opinion."
Scungio continues to be optimistic about the value owners are realizing by investing in real estate.
“Even if you're buying now, you might not see 10 to 15% appreciation year-over-year like we were seeing, you know, going into 2019, 2020, and 2021, but you know 5% is not bad, 6% is not bad, and you have a roof over your head. And now it's getting to the point where renting can be more expensive than owning,” he added.
Spring Market, Inventory Down 30%
“Right now the spring market has sprung — we are starting to see inventory trickle on the market which is a great sign,” said Scungio.
"Typically, this time last year, we'd be a little concerned seeing one home come on the market per week, specifically in on the East Side, but the numbers are trending in the right direction,” said Scungio.
“Regarding inventory which is a great sign for people who are looking to buy a home — so statewide right now there are 734 homes on the market single-family homes, 193 condominiums and 138 multi-families,” said Scungio.
Scungio added that the inventory is down 30% from last year.
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