Cooling Inflation Stirs Hope For Better Interest Rates

There was recently a bit of good news for Minneapolis and St Paul duplex buyers and sellers that may have gotten lost in the coverage of natural disasters, politics and war.

On Friday, the Commerce Department announced prices rose just 0.1% from July to August. More importantly, inflation fell to 2.2%, down from July’s 2.5%.  In other words, we’re getting very close to the Federal Reserve’s targeted 2% inflation rate.

Inflation’s continued decline means it’s more likely the central bank will reduce interest rates at its next meeting, November 6-7. In fact, Fed Chair Jerome Powell said in a speech on Monday that if things continue down the same path, two more rate cuts are possible before the end of the year.

This is good news for both ends of a duplex sale. Buyers who shop now will likely experience the anticipated lower mortgage interest rate weeks before the Fed makes the move as lenders need business every month of the year and tend to lower rates well ahead of an announcement.

Sellers on the other hand, may find when rates change many duplex owners who’ve been indecisive about selling have a moment of clarity. In that case, there will be more competition, and buyers may expect properties need to be in better condition or priced more aggressively in order to sell.

No matter, cooling inflation is good news; regardless of whether we’re in the market to buy or sell.