Declining

mortgage
rates
have
yet
to
break
the
dam
on
the
stalled
housing
market,
but
the
sweet
spot
on
rates
that
would
get
the
market
moving
again
is
about
5%.

That’s
according
to
a
new
survey
from

Mphasis
Digital
Risk,
which
revealed
that
42%
of
prospective
buyers
said
a
5%
rate
would
get
them
back
in
the
market.
An
additional
27%
said
they’re
targeting
a
4%
rate,
while
20%
say
it’s
6%.

“Many
prospective
buyers
started
questioning
the
American
dream
of
home
ownership
as
inflation
brought
mortgage
rates
to
a
cyclical
peak
of
8%
in
October
2023,”
Mphasis
co-founder
and
managing
director
Jeff
Taylor
said
in
a
statement.

“But
now
rates
are
down
more
than
1.5%
from
this
peak.
We’re
getting
closer
to
homebuyers’
comfort
zone
of
low-6%,
high-5%
rates,
and

September’s
anticipated
Fed
cuts
should
help

buyer
sentiment.
This
is
why
industry
estimates
call
for
a
robust
2025
with
$2
trillion
in
expected
mortgage
originations.”

According
to
the
survey,
home
shoppers
are
optimistic
about
the
direction
of
mortgage
rates,
with
64%
saying
they
are
either
“very
encouraged”
or
“somewhat
encouraged”
that
rates
are
dropping.

But
40%
of
respondents
said
they
will
wait
until
after
the

November
election
to
buy
a
home,
which
could
signal
that
the
market
may
not
immediately
react
to

a
rate
cut
in
September.
Real
estate
agents
often
cite
the
election
as
a
factor
in
the
housing
market,
but

a
recent
report
from


John
Burns
Research
and
Consulting
concluded
that
a
seasonal
decline
in
home
sales
is
actually
more
severe
in
non-election
years.

Whether
the
election
is
a
factor
or
not,
home
shoppers
have
not
rushed
into
the
market
despite
the
rate
on
a
30-year
conforming
loan

falling
to
6.55%,
down
from
a
peak
of
7.87%
in
October
2023.

HousingWire
Lead
Analyst
Logan
Mohtashami
said
that

high
mortgage
rates
have
created
an
inventory
buffer.
The
availability
of
homes
for
sale
has
increased
in
markets
across
the
country.
This
is
particularly
true
for
new
homes,
as
builders
have
shifted
to
a
business
model
that’s

heavy
on
spec
construction.

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