Will they or won’t they? Low rates put sellers in mortgage maze as 30-year fixed mortgage drops to 6.47% – lowest in over a year

Mortgage rates are cooling, breathing new life into America’s housing market.

After climbing to crippling highs, the 30-year fixed mortgage rate fell to 6.47%, its lowest point in a year. With inflation falling and economic growth slowing, experts anticipate the Federal Reserve will cut interest rates twice before the end of the year, which may push mortgage rates lower.

Don’t miss:

Realtor.com Senior Economist Ralph McLaughlin says it will be a golden opportunity to enter the market if mortgage rates continue to fall in September and December. The positive news extends to existing homeowners who are considering selling.

A recent Realtor.com analysis showed that 86% of homeowners have mortgage rates below 6%. They hesitated to sell, fearing to lose the favorable rates.

“Home sellers sat on the sidelines, they didn’t want to give up on interest rates in the COVID era,” said Tan Tunador, Atlantic Coast’s vice president of mortgages and chief credit officer.

Trends: This Jeff Bezos-backed startup will let you become an owner in just 10 minutes and you only need $100.

But if rates fall, homeowners won’t feel quite as stuck, and new inventory could be added to the market, prompting more sales.

“There are a significant number of sellers who have not endured — rightly or wrongly — going from a 4 percent rate to a 7.5 percent rate,” said Mason Whitehead, branch manager for Churchill Mortgage in Dallas. “But they can handle going from 4% to something in the 5% to 6% range.

Trends: Commercial real estate has historically outperformed the stock market and this platform allows individuals to invest in commercial real estate with as little as $5,000, offering a target return of 12% with a bonus 1% return boost today!

Rising mortgage rates have freed up many potential home buyers as well as sellers. But with the prospect of lower rates, home ownership is becoming a more attainable goal for many.

“For some who didn’t qualify at 7.5 percent, they will qualify at 6 percent,” Whitehead said. “So you have more people able to buy as well.”

Essentially, a potential wave of sellers entering the market, combined with increased buyer activity due to lower rates, could revitalize the housing market.

See also: If there was a new fund backed by Jeff Bezos that offered a target return of 7-9% with monthly dividends you would invest in it?

Homeowners thinking about selling should start preparing now.

“Mortgage rates have improved and are bringing in potential buyers early, many of whom have given up on buying, either because of low housing inventory or the higher rate environment of the past few years,” Tunador said. “For sellers, listing their home early can give them the opportunity to sell before their competition hits the market.”

Charlie Dougherty, director and senior economist at Wells Fargo, said that as rates have fallen, mortgage applications and refinancing activity have increased.

Trends: Elon Musk’s secret Austin mansion has been revealed through court filings. Here’s how to invest in growing your city before prices rebound.

“Otherwise, mortgage applications remain subdued, but the recent rebound is a promising sign that buying activity is starting to heat up and thaw a housing market frozen by higher interest rates,” Dougherty said.

Even with a drop in mortgage rates, home prices are expected to remain high or fall only slightly. Markets that have been hot, such as Denver, Phoenix and Austin, Texas, could see a more significant drop in home prices. Experts agree that sellers should keep their home price expectations in check.

“Housing affordability is likely to remain strained given the still high mortgage rates and the rapid growth in home prices over the past three years,” Dougherty said. Uncertainty in the economy could “keep the pace of home sales relatively warm.”

Read on: