housing Market Sees Potential Brief Uptick as Mortgage Rates Dip
The typically slow late-August housing market may experience a slight boost as mortgage rates decline following signals from the Federal Reserve’s recent meeting in Jackson Hole. While the seasonal slowdown due to vacations and back-to-school preparations is common, anticipation of a potential interest rate cut by the Fed in September is already influencing mortgage rates.
Though, this positive trend is expected to be relatively short-lived. Mortgage rates, currently averaging 6.55% – nearing a 10-month low – could rise again depending on upcoming jobs and inflation reports early next month. Further significant declines after the Fed meeting on September 17th are considered unlikely.
Redfin Chief Economist Daryl fairweather advises serious homebuyers to prioritize their housing search over leisure activities. “A lot of people mistakenly assume that an interest rate cut in September will cause mortgage rates to fall,” Fairweather stated. ”But the market – not the Fed – dictates mortgage rates,which are falling after Jerome powell signaled from Jackson Hole that a September rate cut is all but guaranteed.”
For Buyers: This presents an prospect to actively search for new listings, price reductions, and take advantage of increased purchasing power. Homebuyers should discuss rate lock options with their lenders and dedicate time to visiting open houses. It’s also a favorable time for agents to revisit previously toured properties that were initially deemed too expensive, as lower rates may now make them more affordable. A buyer with a $3,000 monthly budget can now afford a home priced at approximately $458,750, a gain of roughly $20,000 in purchasing power compared to May when rates peaked at 7.08% and the same budget afforded a $439,000 home.
For Sellers: Sellers are encouraged to consider price reductions and enhance their marketing efforts to attract the returning buyers. Reaching out to previously interested buyers is also recommended.For Homeowners Planning to Sell: Those preparing to list their homes this fall should consider accelerating their timeline. The current dip in rates is highly likely to attract more buyers, making now a possibly advantageous time to list before the market potentially cools again.[Interactive chart showing how much home can be purchased at various monthly payments and mortgage rates -[Interactivechartshowinghowmuchhomecanbepurchasedatvariousmonthlypaymentsandmortgagerates-
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