Home listings are on the rise in the U.S.’s high-demand areas like Seattle and Silicon Valley, as mortgage rates begin to decrease.
Currently, the median home sale price hovers near record levels, largely due to limited inventory. Back in June, the median price peaked at a staggering $426,900.
According to Realtor.com, the number of new homes up for sale saw a 4.2 percent jump in September. This marks the most significant annual rise since the spring homebuying season. In fact, active listings were up 34 percent compared to a year earlier.
Pricey markets around Seattle, San Jose, and Washington D.C. played a significant role in this surge of new homes listed.
The recent decline in mortgage rates was influenced by the Federal Reserve’s decision to cut interest rates last month, marking the first reduction in over four years. The federal funds rate, which had reached a 23-year high, was slashed by half a percentage point to between 4.75 and 5 percent.
Following a series of rate hikes aimed at battling inflation in 2022 and 2023, the Fed’s recent strategies may lead to lower borrowing costs over time. This includes mortgages, car loans, and credit cards, even though the Fed doesn’t directly control mortgage rates.
While mortgage rates ticked up to 6.32 percent this week, many economists are anticipating a cooling trend in the months ahead, which could further stimulate property listings.
“Sellers who have a locked-in low rate have been waiting for changes in market conditions,” Danielle Hale, chief economist at Realtor.com, shared with The Associated Press. “With mortgage rates reaching their lowest point in two years, there’s a clear movement with more sellers entering the market, even during what is generally a slower real estate season.”
Hale expects the average rate on a 30-year mortgage to stabilize around 6 percent as the year closes, significantly lower than last year’s peak of 7.79 percent, as reported by Freddie Mac.
This article draws on reporting from The Associated Press.