- Video shows Skylar Harris, Realtor at The Brokerage House, explaining what the recent cut in interest rates could mean for homebuyers.
- Last week, the Federal Reserve cut interest rates down to 6.9%, a 0.11% drop from the week prior.
- Harris says the price of homes will go up, due to the competition caused by the cut in interest rates.
(The following is a transcription of the full broadcast story)
The price homebuyers pay for a loan is coming down. According to Freddie Mac, the average interest rate for a 30-year mortgage is about 6%. That's down from about 7.8%, late last year. But, what do lower interest rates mean for housing prices? Realtor, Skylar Harris, says it's not all good news for homebuyers.
She says, "House prices will go up when interest rates go down. There will be more buyers, more competition, more bidding wars that could result in people paying ten to one hundred grand over asking."
Matt Rousch, Director of Real Estate at Blue Ox Credit Union, says members and borrowers will definitely be taking advantage of the lower rates. "We are seeing activity increased on the home equity side of lending for the credit union. The demand has increased about 100% this month," says Rousch.
Rousch says buyers are looking into lines of credit and loans more now, than even a month ago. "Every financial institution out there should see demand increasing in their real estate portfolios," says Rousch.
For neighborhoods like Jackson, Harris says this can make buying a home difficult, especially when the demand for housing is high. She explains, "Our supply is so little right now for the amount of homebuyers we have out there. When prices go up for homes, sellers will be like, 'Okay, let's jump on this so we can capitalize.' which is great for sellers. For buyers, not so much." Harris says interest rates are ever-changing, so if you're in the market for a home, there's no time like right now to try to make it happen.
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