Lowering Mortgage Rates May Lead To Better Housing Market

Buying a home in today's market can be challenging, and high mortgage rates are not helping. This makes the average prospective home buyer feel left out of owning a home. There are small signs that this may be changing, with the housing market slowing and starting to favor the new home buyer. Unlike during the pandemic, when you could take advantage of low interest rates things are different as we come out the other side. The underlying reason for mortgage rate hikes is sometimes tied to increasing Federal Reserve interest rates. As the economy starts to rebound the hope is that mortgage rates start to decrease even more.

While demand for homes does not seem to be ebbing, buyers are facing high prices and high mortgage rates. However, there are signs that this new normal may be changing. Recent reporting has found that as many as 1 in 4 sellers initiated price reductions in June. Buyers are also finding that a small reduction in mortgage rates is helping. The Federal Reserve has shown the possibility of cutting interest rates in the future, which could have a lasting effect on rates. A small surge in new home construction, with its potential impact on inventory and prices, could bring a sense of hope and reassurance to the market. 

Homes may be sitting on the market longer, which may be causing price reductions and fewer offers. With more homes being listed, potential buyers are not feeling as much pressure to jump on a home as soon as it is listed. They may even decide to wait it out to see if the prediction of lower interest rates comes to pass, although it's hard to say how long of a wait it will be.

As the market tries to right itself, keeping an eye on rates and working with a great realtor who will help you through the process is key to navigating the market effectively. Contact one of our Century21 Hot Springs Village agents for more information about buying or selling a home!