Housing markets to see the biggest impact of lower mortgage rates

Washington DC, Denver and Raleigh, North Carolina, real estate markets are expected to see the biggest changes as the Federal Reserve begins to lower lending rates.

According to a new Realtor.com report published Tuesday, markets with a high percentage of homeowners with a mortgage stand to see the most changes.

In Washington and Denver, for example, about 75% of owner-occupied homes have mortgages.

But the effect of lower mortgage rates will vary depending on the use of real estate and homeowners in these areas, according to the real estate company.

THE FEDERAL RESERVE DEPENDS ON POINT INTEREST RATES; FIRST RATE REDUCTION IN FOUR YEARS

Two other markets, Virginia Beach, Virginia, and Portland, Oregon, may also be “more sensitive to the impact of lower rates” due to higher mortgage usage, according to the report.

The Federal Reserve cut interest rates in September for the first time in four years. Realtor.com economists now predict that mortgage rates will remain in the low 6% range until the end of 2024, with expectations that they will drop back to the high 5% range next spring. This reduction may stimulate mortgage and home buying activity as more buyers re-enter the market.

THESE FIVE TOWNS HAVE THE HIGHEST PRICES FOR ONE-BED APARTMENTS

Realtor.com Chief Economist Danielle Hale said changes in market rates are likely influencing the buying and selling decisions of many homeowners in the aforementioned markets due to the large share of homeowners with mortgages.

However, Hale also noted that market prices still exceed the prices many homeowners have locked into, keeping them in “golden hands.”

Here are the metros with the highest share of foreclosed homes. These metros will see the most changes, according to Realtor.com:

1. Washington-Arlington-Alexandria, DC – 74.7%
2. Denver-Aurora-Lakewood, Colorado – 72.4%
3. Raleigh-Cary, North Carolina – 72%
4. Virginia Beach-Norfolk-Newport News, Virginia-North Carolina – 71%
5. Portland-Vancouver-Hillsboro, Oregon-Washington – 69.8%
6. Baltimore-Columbia-Towson, Maryland – 69.5%
7. Seattle-Tacoma-Bellevue, Washington – 69.4%
8. Atlanta-Sandy Springs-Alpharetta, Georgia – 69.4%
9. Indianapolis-Carmel-Anderson, Indiana – 69.0%
10. San Diego-Chula Vista-Carlsbad, California – 68.9%

These markets are expected to have the least amount of impact given the high share of direct ownership:

Metros with the highest share of mortgage-free homes:

1. New Orleans-Metairie, Louisiana – 45.8%
2. Buffalo-Cheektowaga, New York – 45.2%
3. Pittsburgh, Pennsylvania – 45.2%
4. Miami-Fort Lauderdale-Pompano Beach, Florida – 43.8%
5. The Tampa-St. Petersburg-Clearwater, Florida – 42.9%
6. Detroit-Warren-Dearborn, Michigan – 41.7%
7. Birmingham-Hoover, Alabama – 41.5%
8. Houston-The Woodlands-Sugar Land, Texas – 41.2%
9. Oklahoma City, Oklahoma – 41%
10. Cleveland-Elyria, Ohio – 40.5%