If you’ve been holding off on listing your home in San Diego because you’re worried homebuyers aren’t out there, now might be the perfect time to rethink.
After months of high mortgage rates keeping potential buyers on the sidelines, the market is starting to change. Recent economic shifts have already caused rates to dip, and just a few days ago, the Federal Reserve cut the Federal Funds Rate for the first time since their series of hikes began in March 2022. While the Fed doesn’t directly set mortgage rates, this decision creates a favorable environment for rates to drop further, especially with more rate cuts anticipated into next year.
Lower mortgage rates are already encouraging more buyers to re-enter the market. As Lisa Sturtevant, Chief Economist at Bright MLS, puts it:
“A drop in the cost of borrowing will help fuel more homebuyer demand . . . Falling rates will also bring more sellers into the market.”
In San Diego, where real estate activity often depends on mortgage trends, this shift is a significant opportunity. With buyer interest on the rise, it could be an ideal moment to discuss listing your home and take advantage of the renewed market energy.
Falling Rates and the Homebuyers Return
In San Diego’s ever-changing real estate market, there’s a clear trend: as mortgage rates drop, buyer activity picks up. The graph below highlights this connection. The orange line represents the average 30-year fixed mortgage rate, while the blue line showcases the Mortgage Bankers Association (MBA) Mortgage Application Index, which tracks how many individuals are applying for mortgages.
When mortgage rates (green) decline, you’ll notice an upward movement in the Mortgage Application Index (pink). This trend indicates that more potential homebuyers are jumping back into the market. In areas like North Park and South Park, where competition for homes is fierce, these lower rates can significantly impact how quickly properties are snapped up. So, with rates easing, it’s no surprise that we’re seeing more San Diego buyers actively re-engaging in the home-buying process.
What This Means for You
According to the National Association of Realtors (NAR), home sales increased in July, which was a welcome shift after four straight months of declines. If you’re a homeowner thinking about selling, this uptick in buyer activity works in your favor.
More homebuyers means more competition, which can lead to higher offers and shorter time on the market for your house. Edward Seiler, AVP of Housing Economics at the Mortgage Bankers Association (MBA), expects this trend to continue.
“MBA is expecting that slower home-price appreciation, coupled with lower rates, will ease affordability constraints and lead to increased activity in the housing market.”
All in all, the market is gradually becoming more accessible to a wider range of buyers. As a result, we could soon see even more individuals actively looking to purchase a house just like yours.
With more buyers entering the market, now’s the time to start getting your house ready to sell.
Bottom Line on Homebuyers Return as Mortgage Rates Drop
With mortgage rates on a downward trend, We are seeing a noticeable increase in buyer activity and the homebuyers return to the San Diego real estate market. Just today as I write this blog, we have had 3 buyer calls. They are now ready to jump back into the market and buy a home in North Park, San Diego. Experts predict this shift will continue, with rates remaining favorable in the coming months. Now is a great time to get your property ready for this surge in demand. Work together with a trusted local realtor like the McT Real Estate Group to make sure your San Diego home stands out and sells quickly in this competitive market.
