After months of hesitation due to high mortgage rates, the real estate market is shifting, offering an ideal opportunity for homebuyers to act. With mortgage rates starting to decline, affordability is improving, and buyers who were previously priced out now have a window of opportunity to secure their dream home.
But this sweet spot may not last long.
Why Now Is the Perfect Time to Buy
As you consider whether to buy now or wait, ask yourself: what will everyone else do if mortgage rates continue to fall? According to a recent survey from Bankrate, over half of homeowners would be motivated to buy if mortgage rates drop below 6% (see chart below). With rates currently hovering around 6.35%, we are close to hitting that threshold. When they fall into the 5% range, more buyers are likely to flood the market, increasing competition and potentially driving up prices.
What Does This Mean for You?
Today’s market presents a unique advantage for buyers. Right now, fewer buyers are actively looking for homes, which means less competition for you. At the same time, mortgage rates have already dropped, making homeownership more affordable. In fact, mortgage payments for a typical home are 7% lower than last year and 13% lower than the peak in May 2024, according to Altos Research.
Plus, while the housing supply remains tight, it’s much higher than it has been in recent years. The number of homes actively for sale has grown by 35.8% compared to last year, marking ten consecutive months of inventory growth.
So, with lower rates, improving affordability, and more housing options, now is your chance to buy before the market heats up.
Why Waiting Could Cost You
If you’re holding out for further rate cuts, it’s important to recognize the risks. As Greg McBride, Chief Financial Analyst at Bankrate, puts it:
"A further drop in mortgage rates could bring a surge of demand, making it tougher to actually buy a house."
Increased competition could push home prices higher, offsetting the benefits of a lower mortgage rate. And in markets with limited housing inventory, buyers may find themselves competing for fewer homes, driving prices even higher.
Bottom Line
Don’t wait until the competition gets fierce and home prices rise. Right now, we’re in a buyer’s sweet spot where you have better affordability, more options, and less competition. Take advantage of today’s market conditions before they shift. Let’s connect to discuss how you can make the most of this opportunity.
