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.

September 2024 Edition

-Slow and Steady Will Win
-The Latest Area Market Statistics
-Monthly Summary — What Does All This Mean?

Slow and Steady Will Win

Fixed mortgage rates continue to inch downward, with the popular 30-year fixed rate now hovering in the mid 5% to low 6% range, and the 15-year fixed rate dipping below 5.5%. These rates are at their lowest levels since February 2023, largely driven by anticipation that the Federal Reserve (FED) will lower rates this week.

The August Consumer Price Index (CPI), released last Wednesday, showed inflation at its lowest point since February 2021. This has strengthened the belief that the FED will begin cutting rates by at least 0.25% at its upcoming Wednesday meeting.

Adding to the optimism, last Thursday’s Producer Price Index (PPI) for August provided further evidence that inflation pressures are cooling. Wholesale prices rose by 0.2% month over month, slightly above economists’ expectations, while the annualized PPI increase of 1.7% was right on target.

Although the latest jobs report pointed to some slowing in the labor market, it didn’t show the significant downturn that would prompt the FED to consider a deeper 0.50% rate cut this week.

It’s important to remember that any unfavorable inflation data could slow the FED’s plans for rate reductions, leading them to adopt a more cautious approach. While rates should continue to edge downward, they may not fall as rapidly as some had hoped. The FED is not in a rush, as long as the broader economy remains healthy—the priority is keeping inflation under control.

In West Michigan, the real estate market remains active, although at a slower pace than in previous years. Average sale prices continue to rise in high-demand areas, though the rate of increase has slowed. Inventory remains a challenge, with not enough homes available to meet the current demand.

Below is a look at the latest market statistics for our focus area.

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. All our focus areas have higher

Average Sale Prices compared to 2023 ending prices, except Saranac and Lakewood. All our focus areas have higher Average Sale Prices from last month. The largest Year-Over-Year Average Sale Price increases to date are Forest Hills (7.67%), Lowell (6.62%), Belding (4.41%), and Caledonia (2.64%). The Lowell School District average sale price has increased $30,148 so far in 2024.

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

Only Saranac experienced a year-over-year Pending Sales increase. Only Belding, Caledonia and Saranac had Pending Sales increases from last month. Caledonia and Belding had slight decreases from last month, and Lakewood remained the same.

September 2024 Monthly Summary

What does this all mean?

It will be interesting to see how the FED navigates interest rate adjustments over the coming months, as they align their decisions with inflation and economic data. So far, their approach to fighting inflation has been precise, deliberate, and cautious. Now that it’s time to lower the “landing gear,” I expect a smooth descent with lower mortgage rates by year-end. The 2025 spring market is shaping up to be something to watch!

West Michigan has weathered the higher rates, but first-time homebuyers are eager for more affordability—and hopefully, more inventory. As I’ve mentioned before, as rates drop, more homeowners may reconsider staying in their current homes with low mortgage rates and decide to make a move for various reasons. This may be a first step to gradually adding inventory.

Let’s hope the data the FED relies on in the coming months continues to be positive!

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 www.rickseese.com or Facebook page or call/text him at 616-437-2576.