Falling Mortgage Rates Are Bringing Buyers Back

Falling Mortgage Rates Are Bringing Buyers Back

If you've been holding off on listing your house because you're unsure if buyers are out there, now might be the time to reconsider. After months of high mortgage rates, the landscape is changing. Rates are already starting to drop due to various economic factors. Just recently, the Federal Reserve cut the Federal Funds Rate for the first time since March 2022. While they don't directly control mortgage rates, this move could lead to even lower rates, especially with more cuts expected next year. And as mortgage rates fall, more buyers are returning to the market. Lisa Sturtevant, Chief Economist at Bright MLS, explains:

“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 capitalize on that renewed buyer interest and make the most of this opportunity.

As Rates Fall, Buyer Activity Goes Up

This graph clearly illustrates how falling mortgage rates lead to an increase in buyer activity. The orange line represents the average 30-year fixed mortgage rate, while the blue line shows the Mortgage Application Index, which tracks mortgage applications. As mortgage rates drop (orange), the number of mortgage applications (blue) goes up, signaling more buyers re-entering the market.

What This Means for You

According to the National Association of Realtors (NAR), home sales saw an increase in July, a positive shift following four consecutive months of declines. For homeowners considering selling, this rise in buyer activity is a great advantage.

With more buyers comes increased competition, which can result in higher offers and quicker sales. Edward Seiler, AVP of Housing Economics at the Mortgage Bankers Association (MBA), expects this trend to persist.

“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.”

Overall, the housing market is opening up to a broader range of buyers, which could mean even more interest in homes like yours.

As more potential buyers enter the market, this is a great opportunity to begin preparing your house for sale.

Bottom Line

The recent drop in mortgage rates is already attracting more buyers, and experts expect this trend to keep going. Let's team up to capitalize on this growing demand and get your house market-ready!