Mortgage Rate Expectations for September 2024 and Beyond: Opportunities for Buyers and Sellers

As we step into September 2024, the real estate market presents unique opportunities for both buyers and sellers. With mortgage rates hovering around 6.35%, down from last year’s high of 7.18%, there are significant advantages to making a move now. But, the upcoming election and shifts in economic sentiment are adding complexity to the decision-making process for many. Here’s what you need to know about the current market landscape and how you can benefit.

Current Market Dynamics and Inventory Levels

One of the key factors influencing today’s market is inventory—or the lack of it. The total number of homes for sale, including active and pending listings, has been steadily increasing over the past year, reaching over 6,300 in July 2024. This is up from about 4,700 homes in August 2023, showing a gradual rise in available inventory (source).

However, this increase comes after a prolonged period of historically low inventory levels, largely driven by sellers who were hesitant to list their homes due to fears about finding a new place to live and facing higher mortgage rates. Many homeowners with low fixed rates locked in during the pandemic boom years have been reluctant to sell, contributing to tight market conditions (source).

The graph showing "Months of Inventory" reflects this cautious sentiment, with the current market at 3.6 months of inventory—a balanced market typically has around 6 months (source). This scenario indicates that while inventory has improved, it remains below optimal levels, keeping pressure on buyers who are still contending with competition, albeit less intense than in prior years.

Scenarios for Sellers Waiting to Make a Move

For sellers, especially those who’ve been waiting on the sidelines, the current environment offers a more favorable landscape:

• Improving Inventory for Buyers: The gradual increase in available listings means that there are more options for sellers worried about finding their next home. The market is slowly balancing, providing a less frantic atmosphere for those needing to sell and buy concurrently (source).

• Lower Mortgage Rates Offer Relief: Current rates are significantly lower than last year’s highs, reducing the financial burden of purchasing a new home. This is especially appealing for those who might have held off due to the cost of borrowing at peak rates. The slight dip in rates can translate into hundreds of dollars saved per month on new mortgages, making the transition more manageable (source).

• Strategic Timing: Sellers now have an opportunity to take advantage of the still-strong demand driven by relatively low inventory. Listing in the coming months means benefiting from a motivated buyer pool, many of whom have been waiting for conditions to improve. As more listings enter the market, being one of the first can position sellers competitively, rather than being lost in a larger wave later (source).

Why Now Might Be the Right Time

For both buyers and sellers, the landscape is shifting in your favor. The combination of slightly lower mortgage rates, improving inventory, and the potential for increased buyer activity due to easing economic concerns makes this an opportune moment. While rates could fluctuate further as we move closer to the election, the current conditions offer a unique window of opportunity to make a move before the market recalibrates (source).

If you’ve been holding back due to uncertainty, consider taking advantage of the current market dynamics. With the right strategy, this fall could present the best conditions we’ve seen in years for making a real estate move that aligns with your goals.