Bryan Charap Chief Financial Officer | realtors.com
Homebuyers and sellers are anticipating a significant change as the Federal Reserve is expected to lower interest rates today for the first time since 2020. Although the Fed does not set mortgage rates, there is a general tendency for mortgage rates to follow the direction of Fed rates. Many in the real estate sector believe this could revitalize the sluggish housing market as fall approaches.
Currently, with mortgage rates around 6.2%, Realtor.com interviewed various real estate agents nationwide to gauge sentiments and expectations regarding this historic rate drop.
Anna Altic, principal broker at Re/Max Homes and Estates in Nashville, TN, expressed optimism: "I believe we are on a downward trajectory for interest rates for the foreseeable future. This will increase a borrower’s spending power and allow them to move into new price points."
Brian Durham, managing broker for Realty Group LLC in Burnsville, MN, shared concerns about supply and demand dynamics: "It will bring more buyers off the sidelines and motivate some people who want to sell to put their homes on the market. My concern is that it will cause more buyers to enter the market than new homes for sale."
Stacy Miller from The Miller Team at Re/Max Fine Properties in Phoenix added, “When rates get below 6%, demand will soar and so will prices and terms.”
Christine Dupont-Patz of Re/Max of Cherry Creek in Denver believes that while more buyers will emerge, they will be cautious: “More buyers will be looking... I don’t think the current pace will shift drastically until the spring.”
Ron Myers of Ron Buys Florida Homes in Wellington expects increased competition among buyers: “A rate drop could be the green light they’ve been waiting for... Sellers will also benefit as a more affordable financing environment could increase buyer competition.”
Dave Flanders from HomeVisors Collective in Burlington anticipates immediate buyer activity: “When rates drop soon, I expect to see a surge in buyer activity because more people will rush to lock in lower rates.”
However, Cindy Allen from DFW Moves in Dallas suggests that some impacts may already be priced into current mortgage rates: "The Fed hasn’t changed rates in over a year... so any effect from a reduction will be less noticeable."
Mike Opyd from Re/Max Premier in Chicago shares similar sentiments: “I believe once the announcement happens... it is almost like they need official confirmation before they do anything.”
In terms of current market behavior, Brian Durham notes strong sales despite supply issues: "With proper pricing and marketing strategies, homes are still moving at a fairly significant pace." Meanwhile, Stacy Miller observes an uptick in activity due to dropping rates.
Sam Fitz-Simon from Compass in Danville sees an increasing housing supply but notes that many are waiting on election outcomes before making moves.
Denise Supplee from SparkRental reflects on longer market times compared to previous years: "For the first time... I have seen homes sit on the market longer."
Regarding future expectations, Denise Supplee anticipates less slowdown than usual if rates drop. Sam Fitz-Simon expects heightened activity starting January through summer next year.
Christine Dupont-Patz highlights how life events keep real estate active year-round despite seasonal trends.
Cindy Allen emphasizes educating clients on financial scenarios rather than waiting for perfect conditions. Dave Flanders concurs that short-term patience might pay off with better deals soon.
Janen Ardia advises focusing on long-term homeownership benefits over short-term rate fluctuations.
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