Mortgage Rates Falling A Good First Step For Housing Market

The Federal Reserve is meeting this week in Washington D.C., and everyone is on their toes waiting to see if they will cut interest rates. High rates have plagued businesses and potential homebuyers since the pandemic and the disastrous rollout of Bidenomics. As a result, there is a housing crisis of not enough supply to meet ever-growing demand.

But there is some good news, as the Fed weighs rate cuts. Mortgage rates have come down ahead of the meeting. It might be a sign that things are turning for the better in achieving the American dream again.

Texas real estate expert Cliff Freeman says this generally is a good thing, because mortgage rates follow whatever the Fed is doing.

"Usually, you look back in history, when you see things start to change like this, it is the start of a new trend," he says.

It would be a welcome trend to say the least. There is already a surplus of houses on the market, but most are owned by corporations who refuse to sell or rent them out. Owning a home has become borderline impossible for people, and anything to realize that dream again is welcome.

These high rates have created the problem and left the market in a tough spot.

"About 40 percent of homeowners have a mortgage of less than 4.5 percent...the disadvantage for a seller when rates are high is they are effectively foregoing that lower rate they have if they do sell," says Freeman.

It has created this cycle where things are too unaffordable for anyone to move. People want to move but cannot because they are not making enough to do so. People do not want to sell so those who do want to buy cannot do so. It repeats over and over.

But this positive trend of mortgage rates taking a tumble might be a positive trend for a market in desperate need of some good news.

"Sellers are locked down, buyer's hands are also tied because the affordability of housing has gotten much worse," Freeman says.

Freeman adds that this is a good step for the market.

The Fed's wrap up their September meeting this week. A rate cut of about .25 percent is expected.