If you’ve been unsure about listing your home due to concerns about buyer interest, now may be the right moment to consult with a real estate agent.
After a prolonged period of high interest rates that kept many buyers out of the market, a shift is beginning to take place. Interest rates are decreasing due to various economic factors, and recently, the Federal Reserve lowered the Federal Funds Rate for the first time since raising it in March 2022. Although the Fed does not directly control mortgage rates, this decision may pave the way for even lower mortgage rates in the future, especially with anticipated cuts from the Fed into next year. This decrease in mortgage rates is already attracting more buyers back into the market. Lisa Sturtevant, Chief Economist at Bright MLS, commented:
“A drop in the cost of borrowing will help fuel more homebuyer demand… Falling rates will also bring more sellers into the market.”
The positive news for sellers is the potential to benefit from increased buyer interest.
As Rates Decline, Buyer Activity Rises
The relationship between declining mortgage rates and increased buyer activity is evident. The average 30-year fixed mortgage rate has been falling, which correlates with a rise in the Mortgage Bankers Association (MBA) Mortgage Application Index that tracks the volume of mortgage applications.
This trend indicates that as mortgage rates decrease, more individuals are re-engaging with the home buying process.
What This Means for You
According to the National Association of Realtors (NAR), home sales saw a rise in July, marking a positive change after four consecutive months of declines. For homeowners considering selling, this increase in buyer activity is advantageous.
A higher number of buyers leads to increased competition, which can result in better offers and a quicker sale for your home. Edward Seiler, Assistant Vice President of Housing Economics at the Mortgage Bankers Association (MBA), noted that:
“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 becoming more accessible to a broader array of buyers, potentially generating more interest in purchasing homes like yours.
With an influx of buyers in the market, now is an opportune time to prepare your home for sale.
Bottom Line
The recent drop in mortgage rates is already bringing more buyers into the real estate market, and experts believe this trend will persist. Collaborate with a local real estate agent to capitalize on the increased buyer demand and start preparing your home for sale.