Falling Mortgage Rates Are Bringing Buyers Back

Falling Mortgage Rates Are Bringing Buyers Back

If you've been holding off on listing your home because you're worried there aren't enough buyers out there, now might be the time to reconsider.

After months of high mortgage rates keeping potential buyers on the sidelines, things are beginning to shift. Mortgage rates are already dropping, thanks to a range of economic factors. And just recently, the Federal Reserve cut the Federal Funds Rate for the first time since March 2022, which, while it doesn’t directly control mortgage rates, often signals further decreases ahead. As more cuts are anticipated, mortgage rates could fall even more—paving the way for more buyers to re-enter the market. As Lisa Sturtevant, Chief Economist at Bright MLS, points out:

“A drop in the cost of borrowing will help fuel more homebuyer demand . . . Falling rates will also bring more sellers into the market.”

This means you, as a seller, can take advantage of the renewed interest from buyers.

Falling Rates, Rising Buyer Activity

There’s a clear relationship between falling mortgage rates and increased buyer activity. The graph below illustrates this: as mortgage rates (the orange line) come down, the Mortgage Bankers Association’s (MBA) Mortgage Application Index (the blue line) rises, reflecting an uptick in the number of people applying for mortgages.

More buyers entering the market means more competition, which can work in your favor.

What This Means for You

According to the National Association of Realtors (NAR), home sales saw an increase in July after four months of declines, signaling a positive shift. If you're considering selling your home, this rise in buyer activity is great news.

With more buyers in the market, competition heats up, which often leads to higher offers and quicker sales. And Edward Seiler, AVP of Housing Economics at the Mortgage Bankers Association (MBA), shares a promising outlook for the months ahead:

“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.”

This market shift is making homeownership more accessible to a broader range of buyers, meaning even more people could be looking to purchase a home like yours.

The recent drop in mortgage rates is already driving more buyers into the market, and experts expect this trend to continue. Let’s talk about how we can take advantage of this increased demand and get your home ready to sell. Feel free to call or email us.