If you’ve been hesitant to list your house because you’re worried no one’s buying, here’s your sign that it may be time to talk with a trusted agent like myself.
After months of high mortgage rates keeping buyers on the sidelines, things are starting to shift. Dropping mortgage rates are creating new opportunities for home sellers. Rates have already been trending downward due to several economic factors. On September 18, the Federal Reserve cut the Federal Funds Rate for the first time since March 2022. While the Fed doesn’t directly control mortgage rates, this action sets the stage for further declines in mortgage rates – especially since more cuts are expected into next year. As a result, dropping mortgage rates are encouraging more buyers to re-enter 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.”
As Dropping Mortgage Rates Bring Buyers, Activity Rises
The graph below demonstrates the correlation between dropping mortgage rates and increased buyer activity. The orange line represents the average 30-year fixed mortgage rate, while the blue line shows the Mortgage Bankers Association (MBA) Mortgage Application Index, which tracks mortgage applications.
As you can see, when mortgage rates (orange) decrease, the Mortgage Application Index (blue) rises, showing that more buyers are applying for mortgages and re-engaging with the housing market (see graph below):
What Dropping Mortgage Rates Mean for You
According to the National Association of Realtors (NAR), home sales increased in July after four consecutive months of declines. This is a clear indication that dropping mortgage rates are bringing more buyers into the market. If you’re considering selling, this rise in buyer activity works in your favor.
More buyers often mean increased competition, which can lead to higher offers and shorter time on the market. Edward Seiler, AVP of Housing Economics at the Mortgage Bankers Association, notes 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.”
As dropping mortgage rates make homeownership more accessible, more buyers are looking for homes like yours. If you’re planning to sell, now is the time to get your house ready.
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The recent drop in mortgage rates is already driving buyer demand, and experts predict this trend will continue. Let’s work together to capitalize on this opportunity and get your home ready to sell. Contact me today at 703-774-5892 or mansoora.dar@ptdmv.com.
