If you have held off on putting your property up for sale due to concerns about a lack of potential buyers, it may be time to re-evaluate & consult with a realtor, like me!
Following several months of high rates that discouraged potential buyers, shifts in the economic landscape are leading to changes. Lower rates are taking effect as a result of various economic triggers. Just recently, the Federal Reserve has lowered the Federal Funds Rate for the first time since an increase commenced in March 2022. While the Federal Reserve doesn’t directly influence mortgage rates, this action paves the way for even lower mortgage rates – especially when we anticipate more rate reductions from the Fed next year. The dip in mortgage rates is prompting more buyers to reenter the market, according to Lisa Sturtevant, Chief Economist at Bright MLS, who says:
“A decrease in the cost of borrowing will boost homebuyer demand… Falling rates will also attract more sellers into the market.”
This spike in buyer interest is a prime opportunity for you to benefit from.
As Rates Fall, Buyer Activity Increases
The graph explains the correlation between decreasing mortgage rates and expanding buyer activity. The orange line signifies the average 30-year fixed mortgage rate, and the green line represents the Mortgage Bankers Association (MBA) Mortgage Application Index, which monitors the volume of mortgage applications.
It’s clear that as mortgage rates decrease, the Mortgage Application Index increases, reflecting a renewed buyer engagement in the housing market.
What This Means for You
The National Association of Realtors (NAR) reports a rise in home sales in July, ending a four-month decline. As a homeowner considering selling, this increase in buyer activity plays to your advantage.
A surge in buyers translates into heightened competition, which can lead to more attractive offers and shorter listing periods for your property.
This trend is projected to persist, according to Edward Seiler, AVP of Housing Economics at the Mortgage Bankers Association (MBA):
“MBA anticipates that the current slower pace of home-price appreciation, combined with lower rates, will alleviate affordability pressures and stimulate further activity in the housing market.”
The market is becoming increasingly open to a broader spectrum of buyers, which could mean more prospective buyers for your property. With more buyers entering the market, it’s an optimal time to prepare your house for sale.
Key Takeaway
The recent decrease in mortgage rates is already leading to more buyers entering the market, and experts predict this trend will persist.
Working together, we can capitalize on this growing buyer demand and get your house primed for sale.
