Mortgage Rate Dip Sparks a Surge in Home Buying Activity

As the 2024 home shopping season nears its end, lower mortgage rates have sparked renewed interest from both buyers and sellers, creating an exciting "last call" in the housing market. According to the latest Zillow® market report, the average buyer gained over $40,000 in purchasing power between May and September, thanks to mortgage rates dropping to 6.08%, a two-year low. This significant decrease in rates brought more buyers and sellers into the market, moving new listings and sales closer to pre-pandemic levels. While home sales in September were still down by 22.2% compared to pre-pandemic norms, this is a marked improvement over recent months. New listings, too, are catching up, decreasing by just 17% compared to the pre-pandemic average.

Boost in Buying Power Fuels Market Activity

Skylar Olsen, Zillow’s Chief Economist, highlighted that the combination of lower rates and more homes on the market allowed buyers to overcome affordability challenges. “September proved the readiness of both buyers and sellers to return when conditions are right. Lower mortgage rates helped more buyers clear the affordability hurdle and gave those already in the market more homes to choose from,” Olsen explained. However, buyers should remain cautious. Following a strong jobs report in early October, mortgage rates ticked up again to 6.32%. The housing market remains in flux, and buyers should be prepared for potential rate swings while ensuring their finances are in order.

Home Values Hold Steady Amid Renewed Interest

The typical U.S. home value now stands at just under $361,000, down slightly (0.2%) from August, but up 2.4% year-over-year. While home value growth has slowed compared to last year, the competition is heating up in many areas. Fewer listings saw price cuts in September (25.1%) compared to August, and homes are spending less time on the market.

Buyers' Markets Spread Across the Southeast

A noteworthy trend is the spread of buyers' markets across the Southeastern U.S. Cities like Atlanta, Jacksonville, and Nashville are among the ten largest metros that favor buyers, thanks to ample inventory and slower price growth. In contrast, coastal cities like New York and Los Angeles remain more competitive due to fewer new listings, making it harder for buyers to find affordable options.

Looking Ahead to October

As the year-end approaches, October typically brings the highest share of price cuts as sellers aim to close deals before the holiday season. However, with mortgage rates fluctuating, it’s uncertain whether September’s heightened market activity will continue. The real estate market is poised for further changes, and buyers need to act fast but wisely.

Capitalize on Lower Rates With Innovative

Looking to capitalize on lower mortgage rates? Whether you’re buying or selling, now is the time to act. Innovative Mortgage Services can help you navigate the shifting market. Don’t miss out—check out Innovative Mortgage's Compensation Plans today to see how you can benefit from our expert guidance!