Homebuyers are 'more savvy than ever,' real estate expert points out

The breaking news on mortgage rates coming in at 6.81% for the fixed 30-year rate, slightly down for the week. However, rates have mostly gone up since the Fed cut interest rates, and that seems upside down. So let's bring in Corcoran Group Luxury Real Estate Advisor Catherine Juricich. So Catherine, why are mortgage rates moving up in general when interest rates are moving down? Hi, thank you for having me. So the Fed set interest rates and the lenders set mortgage rates. So the two are connected, but they're not the same. Lenders take into account other factors, such as the bond market, and the bond market is sensitive to inflation. So we're still not sure where we're going to land on inflation. We're in a confusing time. There's administrative shifts. So depending on, you know, policies that are created around that, that will more correlate how these align. So where do you see mortgage rates then settling in 2025? So currently, the national rate is around 7%, and in New York, it's around 6.5% because of competition. The Mortgage Bankers Association says that they will likely be between, for 2025, 6.4% and 6.6%. And I totally agree. I think that, you know, we were propped up in 2020, 2021, by artificial 2% to 3%. But we are landing probably where we will end up, in the mid-sixes. It sounds like maybe the 3%, 4% mortgages, we won't see those maybe in our lifetime. I don't think we will. I think that, you know, yeah. Yeah. So yeah, I know. Unfortunately, right? Unfortunately, I think that's gone. Yeah. I think you might have missed it. Yeah. So it's well documented that the supply of homes is simply not there, partly because of that. Realtor.com is saying that about 35% of mortgages are between 3% and 4%, with 22% of mortgages below 3%. So those people, like myself, are not moving. You know, that means higher prices, right? Because, you know, still we're seeing pending home sales at a seven-month high, 2% for October. So the consumer confidence, are they still confident in making that investment then, even though, you know, the supply isn't quite there? Yeah. So you're totally right. There's a stock in place that people that have 2% to 3% don't want to move, because then they have to take on this higher mortgage rate. That said, year over year, we're up 25%. In the last 11 to 12 weeks, we've had double-digit contracts signed. So the consumer confidence is really high. I mean, post-election, especially the last two weeks in New York, we're, you know, we've seen contracts signed at all-time highs. So you know, the supply is down, like you said, because people have not been selling. But I think that what will happen is people are going to get used to this new norm. So buyers are going to come out, and, you know, because confidence is high, they're going to transact. Now, on the consumer level, we're starting to see consumers make choices, you know, starting to buy the store brand over the name brand, shopping at Walmart over higher-priced stores. Are you seeing that trend in homes? Yes, I am. So I would say that, you know, homebuyers today are more savvy than ever. They really look at monthly costs. In New York, if you buy a condo, you have taxes and monthlies, so people are really paying attention to that. Also, people are going towards new development because they can get concessions. And I see people also looking outside their comfort zone at areas they think are up and coming. So, you know, you're totally seeing those trends align. Catherine, I appreciate it. Thank you for all of this insight, and hopefully we can all live where we want to live. I hope so. Happy Thanksgiving to you. Yeah, you too.