According to Freddie Mac, a 30-year fixed-rate mortgage is averaging 3.82% at the moment—a two-year low.
Traditionally, when interest rates drop home sales increase, and vice-versa.
So are we likely to see an increase in home sales here in Northern Virginia? Probably not, as the main driving factor in our market is the lack of inventory.
What we will probably see is an increase in the sale-price to list-price ratio, and a decrease in the average number of days on market before sale, as the lower interest rates bring more qualified buyers into the arena. This is good news for potential home sellers, as the likelihood of getting full asking price for your home increases as interest rates drop.
For buyers, it’s more of the same, I’m afraid: Quality listings will attract multiple buyers, and competition for those homes will only get stiffer as interest rates remain low.