Real Estate Investing
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.
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.
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.
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.
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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For Buyers | Mortgage Rates | Buying Tips | Economy
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