Why Now May Be the Best Time to Buy Before Rates Fall

The current Federal Reserve Chair’s term is set to expire in May 2026. Many market watchers believe the administration will appoint a more business-friendly replacement who supports rate cuts to keep the economy moving. If that happens, borrowing costs could drop fast, and housing demand will likely surge.

What does this mean for buyers?

Right now, housing inventory is higher than we have seen in years. According to the National Association of Realtors, existing-home inventory has climbed to about 3.5 months of supply, the highest level since before the pandemic. Builders are also adding new inventory, with new home starts reaching over 1.5 million units last quarter. This gives buyers more options and negotiating power today than they have had since 2019.

But that window will not stay open forever. If a new Fed chair comes in with a mandate to support growth and cut rates, mortgage rates could drop from their current 6.5 to 7 percent range to something closer to 5 or 5.5 percent within a year or two. Lower rates would bring buyers back into the market quickly, eating up today’s inventory and tightening supply.

What happens when rates fall?

• Buyers who waited on the sidelines will rush back
• Competition will rise
• Sellers will regain leverage
• Home prices are likely to push higher

Even now, prices are holding steady thanks to strong demand and limited overall supply. The Case-Shiller Home Price Index shows national prices up about 5 percent year over year as of last month. In many coastal and growing markets, price appreciation is even stronger.

My take...

If you are in a position to buy, now is the time to make a move while there is more inventory and less buyer competition. The combination of higher rates and higher inventory is a rare sweet spot for negotiating a better price. Once rates come down, that advantage will likely disappear.

Bottom line: smart buyers act before the Fed acts.

If you want to talk about local opportunities or see listings before they are gone, I am always here to help.

Call, text, or DM me with any questions about timing, rates, and your next home.