Falling Mortgage Rates Are Bringing Buyers Back

If you’ve been reluctant to put your house on the market due to concerns about a lack of buyers, this could be your signal to reach out to an agent.

After months of high interest rates keeping buyers on the sidelines, the market is starting to shift. Rates are already declining due to various economic factors. Yesterday, the Federal Reserve reduced the Federal Funds Rate for the first time since it began raising it in March 2022. While the Fed doesn’t directly control mortgage rates, this move sets the stage for mortgage rates to drop even further—especially with more cuts anticipated next year. As mortgage rates decrease, 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 the renewed interest from buyers.

 

As Rates Fall, Buyer Activity Goes Up

The graph below highlights the connection between declining mortgage rates and increasing buyer activity. The orange line represents the average 30-year fixed mortgage rate, while the blue line indicates the Mortgage Bankers Association (MBA) Mortgage Application Index, which measures the volume of mortgage applications.

As shown in the graph below, as mortgage rates (orange) decrease, the Mortgage Application Index (blue) increases, indicating that more people are re-entering the market.

 

What This Means for You

The National Association of Realtors (NAR) reports that home sales rose in July, marking a positive shift after four consecutive months of declines. If you’re a homeowner considering selling, this increase in buyer activity could work to your advantage.

With more buyers in the market, increased competition can result in higher offers and a quicker sale for your home. According to Edward Seiler, AVP of Housing Economics at the Mortgage Bankers Association (MBA), this trend is likely 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 market is becoming more accessible to a broader range of buyers, potentially leading to even more people interested in purchasing a home like yours.

With more buyers entering the market, this is the perfect time to start preparing your house for sale.

 

Bottom Line

The recent drop in mortgage rates is already attracting more buyers to the market, and experts predict this trend will continue. Let’s collaborate to leverage this growing buyer demand and prepare your house for sale.