If you’ve been hesitant to list your house because you’re worried no one’s buying, here’s your sign it may be time to talk with an agent.
Buyers have stayed on the sidelines for a number of months, but yesterday the Federal Reserve cut the Federal Funds Rate for the first time since March 2022. While they don’t control mortgage rates, this sets the stage for mortgage rates to fall even further than they already have – especially since the market expects more cuts from the Fed into next year. Lower mortgage rates bring more buyers back into the market.
Lisa Sturtevant, Chief Economist at Bright MLS, says:
“A drop in the cost of borrowing will help fuel more homebuyer demand . . . Falling rates will also bring more sellers into the market.”
The best part? You can take advantage of that renewed buyer interest.
As Rates Fall, Buyer Activity Goes Up
The graph below illustrates the relationship between falling mortgage rates and rising buyer activity. The orange line represents the average 30-year fixed mortgage rate. The blue line shows the Mortgage Bankers Association (MBA) Mortgage Application Index, which tracks the number of mortgage applications.
As you can see, as mortgage rates (orange) come down, the Mortgage Application Index (blue) rises. This shows more people starting to re-engage in the process (see graph below):
What This Means for You
According to the National Association of Realtors (NAR), home sales increased in July. This is a welcome shift after four straight months of declines. If you’re a homeowner thinking about selling, this uptick in buyer activity works in your favor.
More buyers means more competition, which leads to higher offers and shorter time on the market for your house. And, according to Edward Seiler, AVP of Housing Economics at the Mortgage Bankers Association (MBA), he expects this trend to continue:
“MBA is expecting that slower home-price appreciation, coupled with lower rates, will ease affordability constraints and lead to increased activity in the housing market.”
All in all, as the market becomes more accessible to a wider range of buyers, it could result in even more people looking for a house like yours.
Bottom Line
The recent decline in mortgage rates drives more buyers into the market, and experts project this trend will continue. Let’s work together to take advantage of this increased buyer demand and get your house ready to sell.
If you’re ready to make that move, it may be time to brush up on How to Choose the Right Home Loan.