Mortgage rates are falling and buyer activity is picking up as the housing market begins to recover. Builder sentiment is improving, though there's typically a lag between rate changes and market response. Home prices are expected to shift as these trends take hold.
The shift back to a more affordable housing market's already begun. Mortgage rates were in the 7%, now they're in the 5%. And buyer activities picked up again. I mean, but if you think about it, if the headline comes out that hey, interest rates dropped into the 5%, well, homebuyers start to think about it for a few weeks, then they might start to talk about it for a few weeks, then eventually they fill out an application, they get pre approved, then they go looking for houses, then they get under contract, then they close. That's a long process. That's a few months long process. Which is why there's a couple month lag time between rates dropping and buyer activity fully finishing that cycle. The rates have started to drop. The early signs are there. Buyers are applying for mortgages more and more and more than they did last fall. And there's still a lot more room to go for rates to continue to drop. And as they do, more and more buyers continue to plow right back into the market. Builder sentiment had 12 negative months in a row and this month in January was the first positive month. So builders are also seeing the uptick in activity. So the housing market starting to turn the corner. The crash has already happened. Home prices lagged for a little bit. But as rates get more affordable, home prices are going to continue to go up. So the window is closing. Heads up to all buyers and realtors.
