Time to List: How Falling Rates Are Sparking Buyer Interest

If you've been sitting on the fence about listing your home because you're worried no one's buying, now's the moment to act. Recent economic shifts, including lower interest rates, are driving renewed interest among buyers. The Federal Reserve has taken its first step toward cutting the Federal Funds Rate, with more cuts expected in the coming months. While mortgage rates aren't directly controlled by the Fed, this move signals that mortgage rates could drop even further. This change is already reigniting buyer activity, giving homeowners like you a fantastic opportunity to jump into the market.

Rates Drop, Buyers Return

After months of high rates keeping potential buyers on the sidelines, the tide is turning. Economic factors have contributed to a noticeable dip in mortgage rates, and with yesterday’s Fed decision, we’re likely to see even more favorable rates in the near future. Lower rates mean one thing: buyers are ready to make their move.

Lisa Sturtevant, Chief Economist at Bright MLS, highlights the trend:

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

This shift isn’t just about buyers; it's also creating a window of opportunity for sellers. More buyers mean more competition for homes, which could drive up offers and reduce the time your house sits on the market.

A Visual Look: Mortgage Demand Rises When Rates Fall

The graph (shown above) clearly demonstrates the connection between declining mortgage rates and rising buyer activity. The orange line tracks the average 30-year fixed mortgage rate, while the blue line represents the Mortgage Application Index—a key indicator of buyer activity.

As mortgage rates (orange) decrease, the Mortgage Application Index (blue) shows a noticeable increase in activity, especially around September 2024. This pattern suggests that buyers are more inclined to apply for mortgages when rates fall, positioning themselves to enter the housing market. The sharp uptick in mortgage applications in recent months confirms what many in the real estate industry have been waiting for: buyers are back.

What This Means for You as a Seller

According to the National Association of Realtors (NAR), home sales finally increased in July after four consecutive months of declines. This shift in buyer demand means homeowners thinking of selling can capitalize on a busier market. More buyers lead to greater competition for homes, which could result in higher offers, faster transactions, and a smoother overall process.

Edward Seiler, AVP of Housing Economics at the Mortgage Bankers Association (MBA), explains:

“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.”

In essence, homeownership is becoming more accessible to a broader pool of buyers, and this could bring even more prospects to your doorstep.

Bottom Line: The Window is Open

The recent decline in mortgage rates is a clear signal that more buyers are returning to the market. This influx of activity creates a prime opportunity for you to list your home and take advantage of this surge in demand. Let’s work together to prepare your house, so you can benefit from a wave of interested buyers and secure the best possible deal.

By acting now, you're positioning yourself ahead of the curve. So, if you're ready to make a move, the time to list is now!