Real Estate Market Update: What Lower Mortgage Rates Mean for Buyers and Sellers Right Now
Mortgage rates have quietly slipped to around 6%, their lowest level since 2022 and that single shift is already reshaping conversations across the housing market. Monthly payments are roughly 10% lower than this time last year, which is meaningful for affordability. But the key question remains: Will buyer demand actually respond, or will uncertainty continue to hold the market in place? The next few weeks will give us important answers.
A Snapshot of the Local Real Estate Market
Today’s housing market trends point to cautious optimism. Lower rates are creating opportunity, but activity hasn’t surged yet. This is not a market of rapid swings, it’s one defined by testing and signals.
Inventory Levels: Still Tight, and Getting Tighter
One of the most important real estate insights right now is supply. New listings are running about 10% below last year, and overall inventory recently fell due to a holiday-driven slowdown. Unsold inventory is now only 10% higher year over year, down sharply from more than 30% growth just a few months ago.
Regionally, the picture varies:
- Florida inventory is nearly flat year over year
- California is only slightly higher
- Texas inventory is up about 10%
This tells us that, nationally, inventory levels are no longer building at the pace we saw earlier. For sellers, this means competition is not as intense as many headlines suggest. For buyers, it means choices remain limited—especially for well-priced, move-in-ready homes.
Pricing Trends: Stable, With a Close Eye on Reductions
Home prices are holding steady. Median pending prices are up about 1.4% year over year, while asking price per square foot is down roughly 1.2%, though improving. Overall, prices are staying within a narrow ±2% range, signaling a market searching for equilibrium.
One of the fastest indicators of market direction is price reductions. Currently, about 35% of listings have cut their price, slightly higher than last year. If lower mortgage rates successfully unlock buyer demand, we should see price cuts decline quickly—similar to early 2023 when rates last hovered near 6%. If not, elevated reductions may persist, as they did when rates stayed above 7%.
Buyer Demand: Improving, but Cautiously
Buyer demand is showing modest improvement. Weekly home sales are just 1.4% above last year, which is encouraging but not yet convincing. Lower rates help, but weak job growth continues to weigh on confidence.
For a more meaningful shift, pending sales would likely need to run around 5% above 2025 levels. Until then, buyers remain selective, focused on value, and less willing to stretch on price.
What This Means for Buyers and Sellers
For buyers, this environment rewards preparation. Lower rates improve affordability, but competition still exists for the best homes. Acting decisively—while staying disciplined on price—can create real leverage.
For sellers, strategy matters more than ever. With inventory tight but demand still testing the waters, accurate pricing and strong presentation are critical. Homes that are positioned correctly are moving; those that miss the mark are adjusting.
Looking Ahead: What to Watch Next
The next few weeks will show whether lower mortgage rates near 6% lead to a real pickup in buyer demand. The report highlights two key indicators to watch: price reductions and pending sales. If demand improves, price cuts should decline quickly, as they did in early 2023. If not, elevated reductions may persist.
While sales are slightly higher than last year, a more meaningful recovery would require pending sales to run closer to 5% above 2025 levels. For now, demand is still being tested, and market direction will depend on how buyers respond in the near term. If you’d like to discuss what these trends mean for your buying or selling plans, feel free to reach out.
You can also watch a brief market breakdown here:
