• 2 months ago
Danielle Hale, Chief Economist at Realtor.com, joins TheStreet to discuss the impact falling interest rates play in the housing market.
Transcript
00:00The Fed just cut rates for the first time in four years.
00:04We have policymakers hinting that more rate cuts are to come.
00:09What impact do you expect this to have on the housing market?
00:14Yeah, so as the Fed normalizes policy, I expect we'll see mortgage rates decline.
00:20That should provide a nice boost for buyers.
00:22It increases their purchasing power or enables them to cut back on the amount of their income
00:27that they're putting towards their home payment.
00:30And so that should boost housing demand.
00:33It also has the potential to increase housing supply.
00:36A lot of existing homeowners are locked into their current mortgage rate because it's so
00:41far below the rates that have been available in the mortgage market.
00:46It's still the case that over half of homeowners with a mortgage have a rate that's under 4%.
00:51So we're not likely to totally unlock those homeowners anytime soon.
00:55But every step down in the mortgage rate is going to make a difference for someone
00:59who's going to be able to move forward with not only a home sale, but also likely a future
01:03home purchase.
01:04And that is really going to help improve conditions in the housing market.

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