VICTORVILLE, Calif. — Century 21 Desert Rock Realtor Monica Lu'uga tells her clients to get their ducks in a row in the coming months, especially if they want to buy a home in the High Desert.

With the Federal Reserve set to meet again this week, mortgage rates could drop in the next few months.

“If that happens, I think everything housing is going to go up again,” said Lu’uga to Spectrum News. “Sellers are going to have a field day again.”

The Federal Reserve will meet Wednesday to possibly raise interest rates for the last time as part of a yearlong effort to stem historically high inflation to 2%.

In March, the central bank met and raised interest rates for the ninth consecutive time since March 2022, going from nearly zero to just under 5%, according to reports. While interest rates and mortgage rates differ, the Federal Reserve’s actions on raising interest rates usually influence mortgage rates and long-term loans.

It’s still unclear which way the Federal Reserve will lean Wednesday regarding a rate hike. The latest consumer index report shows inflation cooled in March, indicating that the central bank’s hikes are working.

But if the Federal Reserve decides to pause rate hikes during this meeting or next, mortgage rates could drop and spur another homebuying run, many housing experts said. 

The National Association of Realtors Senior Economist Nadia Evangelou said as inflation eases, mortgage rates could head below 6% in the coming months.

“Falling mortgage rates create opportunities for many buyers,” said Evangelou in a news release. “A lower mortgage rate brings down the monthly payment for a home loan. If rates drop to 6%, 3.1 million, more households will once again be able to afford to buy the median-priced home compared to the beginning of the year.”

Lowering the mortgage rate could spark more housing movements in San Bernardino’s High Desert, such as Victorville, Apple Valley, Phelan, Hesperia and other cities up the 15 North Freeway. 

The area, more commonly known as the cities many residents in Los Angeles, Orange, and Riverside County residents pass as they drive to Las Vegas, is one of the few places in Southern California where a nicely sized home could be had for $350,000 and a mortgage less than $3,000.

According to an affordability calculator created by the National Association of Realtors, the average monthly mortgage payment in San Bernardino is currently $2,664, compared to last year’s $1,630. 

Like many cities and counties across Southern California, San Bernardino County is experiencing a record-low inventory level. Demand has fallen only slightly because of high-interest rates and the low number of homes for sale, according to Reports on Housing, a data site that covers Southern California’s housing market.

“If more homes were available, pending sales would rise,” said Steven Thomas, an economist at Reports on Housing. “Buyers cannot buy what is not available. This scarcity of homes will continue as long as rates remain elevated.”

Spring is usually the start of the homebuying season and continues upward throughout the summer before it slows when school resumes. However, the lack of homes for sale has muted the housing market. Several people have hunkered down, either happy or handcuffed to the low-interest rates offered during the first couple of years of the COVID-19 pandemic.

Lowering mortgage rates could incentivize people to sell, experts said. San Bernardino sits at around 2,900 homes for sale in April, its lowest level since April last year, when it had about 2,600 homes on the market, according to Reports on Housing. Before the pandemic, San Bernardino averaged nearly 4,900 homes during the spring market.

“This is the latest bottom,” said Thomas to Spectrum News. “It’s no different than what’s happening across Southern California.”

Thomas said the market is growing hotter as buyers willingly jump into the fray despite the higher rates and low supply. According to Mortgage Daily News, the 30-year-fixed rate is 6.7% as of Monday.

A look at Redfin’s latest seven-day sold listing shows homes that have sold less than a month after being listed and for above the list price. 

“Buyers entering the market today are blown away at just how fast homes that are in good condition and priced according to their fair market values are flying off the market with dozens of offers to purchase,” Thomas said. “Open houses are bursting at the seams. In some cases, inspection and appraisal contingencies are once again being waived like they were when mortgage rates were below 3%.” 

Lu’uga, the real estate agent specializing in this market, said people should expect the market to heat up again, especially if mortgage rates fall. She noted that San Bernardino County is experiencing a commercial and residential boom, which is good for the economy. 

The e-commerce boom is fueling the county’s growing industrial and warehouse businesses. Brightline West is beginning work on an electric train that could travel 200 miles per hour from Apple Valley to Las Vegas. 

The San Bernardino Airport is looking to attract more airlines to the regional airport to serve the county’s residents. More are coming.

“Aside from being affordable, we have a lot of commercial and residential developments being built,” Lu’uga said as she rattled off the projects like the Brightline train and industrial buildings. “I think we’re going to be a hot market again. We have a lot going for us.”