I’ve posted this in past posts, so its nothing new, but interesting nonetheless to see the effects of the interest rates on buying power. 

Redfin reports that with a monthly budget of $3000, a $453,000 home can be purchased, up from $416,000 just a few months ago. And this savings comes from just a 1% drop in rates. 

With rates expected to continue down, the news for buyers can only get better. Or can it?

With lower rates will bring more buyers back in the market which could lead to a spike in prices, which may offset the savings due to the rate drops. 

But I think the spread in rates, today vs the sub 4’s we saw before the “end of covid”, will keep inventory levels favorable to only moderate growth in home values. 

Additionally, I think time is on the side of moderate growth in home values because I think the cuts in rates will not be outpaced by a rise in inventory levels.