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Falling Mortgage Rates Are Reigniting the Housing Market

Real Estate Investing

Falling Mortgage Rates Are Reigniting the Housing Market

If you’ve been hesitant to list your home because you’re worried no one is buying, this is the signal you’ve been waiting for—it may be time to talk with an agent.

After several months of elevated mortgage rates keeping buyers on the sidelines, the tide is starting to turn. Mortgage rates are already on the decline, thanks to a mix of economic factors. Yesterday, the Federal Reserve cut the Federal Funds Rate for the first time since they started raising it back in March 2022. While the Fed doesn’t directly control mortgage rates, this move lays the groundwork for further reductions in mortgage rates. Experts anticipate more cuts in the future, which means rates could drop even more as we head into next year. And these lower rates are already enticing buyers back into the market.

Lisa Sturtevant, Chief Economist at Bright MLS, explains it this way:

“A drop in the cost of borrowing will help fuel more homebuyer demand . . . Falling rates will also bring more sellers into the market.”

In short, declining mortgage rates are creating an environment where both buyers and sellers can thrive. For sellers, this is great news—you can tap into renewed interest from buyers and potentially sell your home faster and at a better price.

As Rates Fall, Buyer Activity Rises

There is a clear relationship between falling mortgage rates and rising buyer activity. Data from the Mortgage Bankers Association (MBA) Mortgage Application Index, which tracks the number of people applying for mortgages, shows an uptick in interest as mortgage rates decrease. The chart below highlights this trend: the orange line represents the average 30-year fixed mortgage rate, while the blue line tracks the Mortgage Application Index.

As the graph shows, when mortgage rates drop, the number of mortgage applications tends to increase. This is a strong indicator that more people are re-engaging with the homebuying process. Lower rates make purchasing a home more affordable, so buyers who were previously on the fence are now stepping back into the market.

What This Means for You as a Seller

According to the National Association of Realtors (NAR), home sales experienced an increase in July 2024, breaking a streak of four consecutive months of declines. This uptick in buyer activity is a promising sign for sellers.

More buyers means more competition, which can often lead to higher offers and a quicker sale. If you’re thinking about selling your home, now could be the perfect time to get it on the market. Edward Seiler, AVP of Housing Economics at the MBA, predicts that this trend will 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.”

What this means for sellers is that the market is becoming more accessible to a broader range of buyers. This increased demand could bring even more potential buyers to your door, leading to better outcomes for you as a seller.

Time to Prepare Your Home for Sale

With more buyers entering the market and rates continuing to drop, now is the time to prepare your home for sale. Taking the necessary steps to present your house in the best light could make all the difference when it comes to receiving multiple offers and securing a quick sale.

Bottom Line

Falling mortgage rates are already boosting buyer activity, and experts agree that this trend is likely to continue. If you’ve been considering selling your home, the current market conditions could work in your favor.

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Complaints prompt Carlsbad to remove traffic circles City will install all-way stop signs instead of roundabouts at two Kelly Drive intersections A vehicle maneuvers through the traffic circle at Park Drive and Kelly Drive in this view looking north up Kelly Drive. Above left is Laguna Riviera City Park, behind it is Kelly Elementary School. (Charlie Neuman/For The San Diego Union-Tribune) A vehicle maneuvers through the traffic circle at Park Drive and Kelly Drive in this view looking north up Kelly Drive. Above left is Laguna Riviera City Park, behind it is Kelly Elementary School. (Charlie Neuman/For The San Diego Union-Tribune) By PHIL DIEHL | [email protected] | The San Diego Union-Tribune UPDATED: June 20, 2025 at 6:15 AM PDT Carlsbad’s City Council voted unanimously Tuesday to remove two traffic circles, or small roundabouts, that residents said were “a failed experiment” installed in 2013 as a pilot project. Homeowners near the traffic circles at two intersections on Kelly Drive said the traffic circles encourage speeding and create a safety hazard for children walking to the nearby Kelly Elementary School. “It is a mess, truly a mess,” said Sheila O’Neill, who volunteers as a crossing guard at the school. “The roundabout nudges cars closer to the crosswalk and kids crossing the street … all-way stops would be great. It would make next year so much better.” Traffic circles are different from roundabouts, although the terms often are used interchangeably. Traffic circles require less space and generally are placed in residential areas. Roundabouts are larger, sometimes with landscaping, usually have pedestrian crosswalks set back from the intersection, and are installed on busier streets and thoroughfares. Carlsbad approved the interim traffic circles for two intersections on Kelly Drive — at each side of Kelly Elementary School — one at Park Drive and the other at Hillside Drive. Each one is essentially a circle of small ceramic bumps or domes on the asphalt at the center of the intersection for vehicles to drive around. The bumps are small enough that cars can drive over without damage. “This was a well-intentioned experiment, but it’s time to acknowledge its failure,” said Steve Linke, a resident and former member of the city’s Traffic Safety and Mobility Commission. Council members agreed with the speakers. One of the options presented to the council was to proceed with a final design, environmental studies and permits for roundabouts to replace the Kelly Drive traffic circles. Instead, the council voted to remove the traffic circles, resurface the roadway with a slurry seal, and install all-way stop signs. Also, the council directed city staffers to consider the costs and benefits of other possible improvements such as bike lanes, crosswalks and curb ramps, and bring that information back at a future meeting. “It’s a good opportunity to step back, catch our breath and listen to what our residents are saying,” said Councilmember Keven Shin. “I feel like an all-way stop would create a lot of safety for the kids.” Teenagers on e-bikes ride south on Kelly Drive approaching the traffic circle at Hillside Drive, shown at right, where underground pipeline work continue in the middle of the circle. At right is the east end of Hillside Drive. (Charlie Neuman / For The San Diego Union-Tribune) Teenagers on e-bikes ride south on Kelly Drive approaching the traffic circle at Hillside Drive, at right, where underground pipeline work is underway in the middle of the circle. At right is the east end of Hillside Drive. (Charlie Neuman/For The San Diego Union-Tribune) Earlier this year, the City Council hit the brakes on the long-planned installation of a roundabout to replace the traffic signals at the beachfront intersection of Tamarack Avenue and Carlsbad Boulevard. That project also faced widespread community opposition. And the council has said that sometime soon it will reconsider a still unbuilt roundabout that it approved in 2023 for the intersection of Cannon Road and Carlsbad Boulevard. Roundabouts and traffic circles are elements of a “complete streets” program that Carlsbad has been working on for several years. The program’s goal is to prioritize safety for everyone on the roads, whether they are driving, walking or biking. In March the City Council approved five traffic circles to be installed at intersections in the older downtown Barrio neighborhood starting in 2026. Barrio residents generally supported the installations because they are expected to help control traffic and reduce speeding. The city obtained about $4 million in federal funding for the Barrio traffic circles. Originally Published: June 19, 2025 at 7:50 AM PDT

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