What Does a 6% Interest Rate Mean for Mortgages in Our Market?

According to National Association of REALTORS® research, a 1% decrease in mortgage interest rates could add about 5.5 million households, including 1.6 million renters, to the pool of potential buyers.  Today, the Federal Reserve cut rates by .25% https://finance.yahoo.com/news/live/live-coverage-federal-reserve-cuts-interest-rates-by-025-powell-warns-theres-no-risk-free-path-134139574.html  How will further decrease to 6% affect different markets--below is a scenario by National Association of Realtors for the So Cal metro region:

   Los Angeles-Long Beach-Anaheim, CA

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☞ 2.7% increase in the share of households who qualify at lower mortgage rates.

☞ 15.2% of households that can qualify with 6% mortgage rate.

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If mortage rates fell from 7% to 6%...
☞ 122,864 more households would afford the median-priced home.

☞ While 10% of these households typically buy a home...

12,286 additional home sales are expected in the next 12 to 18 months in Los Angeles-Long Beach-Anaheim, CA.

 

 

 

 Data Source: NAR Calculations, U.S. Census data
Chart by Jovi Dai/National Association of REALTORS®

 

Julia Huntsman, REALTOR, Broker | http://www.abodes.realestate | 562-896-2609 | California Lic. #01188996