Danielle Hale Chief Economist | realtors.com
As interest rates decline, the real estate market is showing signs of recovery. According to a recent report from Realtor.com®, the number of homes under contract in September increased by 3.5% compared to the previous year. This rise in pending sales marks a significant improvement from August's modest 0.3% gain.
Scott Waters, a real estate agent in Glen Allen, VA, commented on this development: "The 3.5% uptick in contract signings in September signals a cautious optimism among buyers who feel more confident about their ability to negotiate, despite high rates."
The Federal Reserve's interest rate cut in September has contributed to this trend by bringing mortgage rates down to their lowest level in two years. Ralph McLaughlin, an economist at Realtor.com and author of the study, noted that lower rates have enhanced buyers' purchasing power and increased home choices.
Noelle Tassey, CEO of Redy, emphasized the importance of negotiation for buyers: "Negotiating is key in a market like this," she said. "And if you aren’t getting the deal done on the terms you’re looking for, you can always walk away—there will be more opportunities."
For sellers, this increase in housing contracts indicates a more active market heading into what is typically a slower season. Tassey advised sellers: "I would encourage sellers who missed the summer season to get out there and list now, rather than waiting for next spring or summer."
However, Scott Waters warned sellers against overpricing: "This is a wake-up call for sellers: Overpricing in a slow market won’t work," he stated.
Mike Wall from eXp Realty highlighted that while demand remains strong, realistic pricing is crucial for closing deals.
Despite these positive signs, some regions remain sluggish. Andrew Fortune from Colorado Springs observed that many agents have left the industry due to low sales volumes. Similarly, Cara Ameer reported slow activity in Southern California but noted that Northern Florida benefits from new construction incentives.
Jeff Lichtenstein predicted increased market activity post-election: "Once the election passes and seasonality gets closer, more buyers who need a mortgage are going to come out of the woodwork," he said.
Fred Meyers expressed optimism about ongoing demand: "People still need homes... For sellers... there’s still demand if your home is priced right."
Alerts Sign-up