The Real Estate Corner with Rick Seese: February 2024 Edition

Rick Seese has 47 years experience working in real estate market, and each month, he shares the latest news and outlook for Lowell-area housing market.

February 2024 Edition

-My Perspective – The Rollercoaster Interest Rate Ride
-The Latest Area Market Statistics
-Monthly Summary – What Does All This Mean?

My Perspective – The Rollercoaster Interest Rate Ride

The rollercoaster ride with inflation and interest rates shows no signs of ending soon. Unfortunately, in January, the Producer Price Index (PPI) accelerated, indicating that some inflation pressures in the economy remain elevated.

The Labor Department reported this past Friday that the PPI, which tracks inflation before it reaches consumers, rose 0.3% from December to January, following a -0.1% decline from November to December. These PPI figures come after a surprisingly hot report earlier last week, showing that the Consumer Price Index (CPI) eased less than expected last month. This suggests that the surge in post-pandemic inflation is gradually coming under control but remains a bit problematic.

Homebuyers are still feeling the effects of inflation, particularly as interest rates continue to thwart any increases in demand. Additionally, consumers remain concerned about elevated prices for goods and services that affect their monthly spending budgets. The good news is that inflation measures have decreased from their peaks and are approaching the Federal Reserve’s (FED) target level of 2%.

FED officials have expressed optimism that inflation is on a downward trend, with expectations of being able to cut interest rates a few times this year. If inflation returns to the Fed’s 2% target, high borrowing rates would likely no longer be necessary. Instead, the Fed would be expected to begin to cut rates, making consumer, mortgage, and business loans more affordable.
Many economists had anticipated the FED’s first rate cut as soon as March. However, two weeks ago, the FED indicated that they needed “greater confidence” that inflation is sustainably returning to its 2% target before considering rate reductions. Most economists now predict a rate cut in May or, more likely, June.

It seems that reaching the goal to the FED’s 2% target may be a stubborn journey. While we eagerly await interest rate relief, especially for First-Time Homebuyers, it’s essential to ensure that inflation is fully under control. Whether we achieve the FED’s goal of “greater confidence” in June or later, we must brace ourselves for the final ride on the rollercoaster. Patience is indeed a virtue.

The 30-year fixed rate peaked in November at around 7.75%. In mid-January, the market began to anticipate lower rates and the same 30-year rate came down to almost 6.5%. It is now back up to around 6.875%.

As we begin the new year, here are the most recent statistics from our focus area markets:

The Latest Housing Statistics

We are comparing the current 12-Month Rolling Average Sale Prices with the final 2023 Average Sale Prices within our surrounding focus area school districts. Forest Hills, Lowell, Belding, and the Entire MLS are above their 2023 ending prices. Rockford, Caledonia, Saranac, and Lakewood have lower average sale prices to begin 2024.

Here are the beginning 2024 12-Month Rolling Average Sale Prices for our Surrounding Townships. The Lowell School District takes up a portion of each of these townships, except Vergennes and Lowell, where those entire townships are totally encompassed by the Lowell School District. All our focus area townships had increases from last month, except Cascade, Boston, and Keene. This chart shows us a bit more of current geographic values, rather than school district values.

Pending Sales are sales under contract with an accepted offer, but those transactions have not been finalized yet (closed).

The Entire MLS witnessed another year-over-year decline in Pending Sales when comparing January 2023 with January 2024. (2,314 to 2,136). All our focus area school districts reported decreases, except Saranac and Lakewood, with Belding staying the same.

As we approach the beginning of spring weather, we should begin to experience more demand and additional inventory. We will look at this chart closely over the next few months, as the hope of lower interest rates becomes the focus of buyers and sellers.

February 2024 Monthly Summary

What does all this mean?

As we kick off 2024, we find ourselves grappling with the same concerns that have followed us from 2023. Low inventory remains at record lows, putting a damper on demand. Interest rates are impacting affordability, particularly for First-Time Homebuyers. If inflation continues to ease toward the Federal Reserve (FED) goals, reductions in interest rates could set off a chain reaction that addresses our entire list of concerns.

Sellers are hesitant to list their homes, given that their current mortgage rates are much lower than the current market rates, making selling and moving less appealing. However, lower rates could potentially alter these decisions, leading to an increase in inventory and offering more choices for buyers.

Despite these challenges, the housing market has shown remarkable resilience, particularly in West Michigan and our focus area school districts. We’ll remain vigilant as we navigate the evolving landscape of inflation and interest rates, especially as we approach the spring market ahead.


Rick Seese works with buyers and sellers of residential, commercial, and industrial real estate. He is an Associate Broker with Greenridge Realty, Inc. and has been licensed full-time for over 40 years. If you’re interested in reaching out to Rick for more information, or have a question for the monthly article, you can contact him via email ([email protected]), visit his website at or Facebook page or call/text him at 616-437-2576.

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