Agents across the US are getting calls from would-be clients
who realize buying is suddenly getting cheaper
Like an avalanche growing larger as it tumbles down a mountain, real estate agents are seeing swelling demand from buyers as mortgage interest rates plummet and — contrary to what some observers previously expected — home buying actually gets cheaper.
The latest news of falling mortgage rates came Thursday, when a new survey from Freddie Mac revealed that the average for a 30-year fix-rate mortgage had dropped from 4.28 percent to 4.06 percent — the biggest single-week decline since 2008. The rate drops are tied to the Federal Reserve’s belief that the economy is poised to slow down, according to an economist from Freddie Mac.
However, falling rates suddenly raised the possibility that the deal could be profitable again, and it’s currently on its way to closing.
The agents who spoke to Inman for this story indicated that, with news about rates only now beginning to spread widely, it’s still too early to tell how exactly residential consumers will respond. And no one reported experiencing a flood of closings in recent weeks.
Curiously, it wasn’t long ago that many in the real estate industry were bracing for the exact opposite scenario. Last year saw a string of headlines about rising rates and their (potentially negative) impacts on the real estate industry. By December, regulators had raised the federal interest rates four different times and many were bracing for additional hikes in 2019.
Instead, the Fed has most recently declined to raise interest rates and signaled earlier this month that no more hikes were in store this year. (Mortgage rates aren’t set by the Fed, but instead are influenced by what the agency decides to do with the federal funds rate.)