Real estate markets across the United States have begun responding to lowering interest rates.
In the first week of August, the average rate on a 30-year fixed rate mortgage dropped to 6.73%.
As a result, the Mortgage Bankers Association reported that mortgage applications jumped 6.9% over that week, while refinance applications rose 16% over that same period.
“The drop has occurred largely as a result of encouraging signs that inflation is easing and that the Federal Reserve will be cutting the federal funds target rate sooner rather than later,” says Charlie Dougherty, director and senior economist at Wells Fargo.
Indeed, with the rate of inflation hitting a three-year low, Federal Reserve chairman Jerome Powell is expected to announce the first of a long-awaited series of rate cuts sometime in September.
However, this may not translate into an immediate effect on housing prices, as lowered interest rates could stimulate additional competition for limited housing inventory. Churchill Mortgage estimates that every 1% drop in interest rates correlates to roughly five million more households qualifying for homeownership.
Here in Huntsville, the market is looking lively.
The Huntsville Area Association of Realtors (HAAR) has released its report for the first week of August.
New listings were up, by 15.8% for single-family homes and 130.8% for townhouse units. Pending sales were up by 8.7% for single-family homes, and 380% for townhouses.
Housing inventory in the Huntsville area market continued to rise, with single-family homes seeing a 38.8% increase, with townhouse units seeing an increase of 144%.
As a reminder, the new rules for realtor commissions announced by the National Association of Realtors in March will be coming into effect on the 17th. These new rules are designed to ensure transparency in the process of realtor commissions. For more information, visit the National Association of Realtors website, www.nar.realtor/the-facts.
The Huntsville Business Journal will continue to report developments in the real estate industry, both nationally and here at home.
