Many experts are predicting that mortgage rates will drop in the fall, which is music to many would-be buyers’ ears.
But if you’re thinking about buying a home in the coming months, it’s important to understand how the rate drop may impact the housing market, and what you need to know to successfully navigate that market and buy a home.
So what, exactly, does that look like?
A recent article from realtor.com outlined things buyers may want to prepare for if and when rates drop in the fall, including:
- Homes may not become more affordable. Many buyers are hopeful that home prices will drop along with interest rates, but that’s not how the market is shaping up. In fact, the realtor.com research team predicts that home prices will rise 4.6 percent by the end of the year. So, while interest rates might go down, it might not bring the overall cost of houses down.
- Homebuyers may need to put in more offers. As mortgage rates fall, more buyers will hit the market, and, as such, buyers may need to submit multiple offers before one gets accepted. So, in this fall’s market, persistence is key!
- Lower rates could increase inventory. Many homeowners who locked in low mortgage rates have been hesitant to move. But if rates fall significantly, many of those homeowners may feel more comfortable making moves and listing their homes. This could translate to an increase in inventory, and more property options for buyers. In fact, realtor.com predicts that housing stock will climb by 14.5 percent annually in 2024.