Metropolitan areas of the country to benefit from the drop in mortgage rates

Metros in Virginia, Colorado and North Carolina with younger and mobile populations are the most beneficial, because mortgage rates derive from the fork of 6%, according to a new report by Realtor.com.

The Federal Reserve announced the first drop in interest rates of the year last week, political decision -makers reducing its reference interest rate of 25 base points. Mortgage rates do not always fall into locking with Fed movements, but cuts often create downward pressure on borrowing costs. Last week, the fixed rate mortgage of 30 years fell to 6.26%, down compared to the average of the previous week by 6.35%.

Currently, more than 80% of existing mortgages have a rate of 6% or less, so as mortgage rates approach the level of 6%, the Realtor.com project project, there will be more movement on the market, especially in areas with high mortgage use. Last week, the share of mortgage requests which was refined has climbed to its highest national level since January 2022, according to the chief economist of Freddie Mac, Sam Khater.

The Fed reduces interest rates for the first time this year in a context of weakening the labor market

While the refinancing activity resumes at the national level, Washington, DC, Denver, Virginia Beach and Raleigh, are particularly placed to feel the biggest impact, according to the Realtor.com report. These metros have the largest share of mortgage households, which means that these metros are ready to see a particular increase in buyers’ demand as the conditions improve, according to Realtor.com Economist.

Compared, Miami, Buffalo and Pittsburgh are among the metros least linked to mortgages, which suggests that their housing markets can be slower to respond to drop rates, depending on the report.

Inflation remained stubbornly high in August because the Fed weighs the rate drops

“The drop in open mortgage rates from doors to many potential buyers and sellers, but where you live determines to what extent the market changes in response to the opportunity,” said the chief economist of Realtor.com, Danielle Hale, noting that markets such as Denver or Washington, DC, are more likely to trigger renewed activities given that most of the owners are payment. In Washington, DC in particular, almost three -quarters of the owned houses bear a mortgage.

A house for sale in Washington, DC, in 2023. (Aaron Schwartz / Xinhua / Getty Images)

However, areas with older populations and pure and simple owners, such as Buffalo or Miami, can see a lower market level response, even if the lower rates are a difference in difference for some people on these markets.

Is a more affordable housing market on the horizon?

The good news is that for people who bought houses earlier in life, increasing property values ​​allow them to strengthen equity over time. This capital can be used to refinance, or sell and reduce size, by reducing or eliminating the need for a new mortgage debt.

Meanwhile, for new buyers, the softening of mortgage rates can unlock affordability and extend choices, depending on the report.

The seller’s chance will be based on geography. For example, those who in high mortgage metros can see faster markets and stronger competition, while sellers on the markets of pure and simple owners can find more strict and less volatile conditions.

A row of houses along Valley Avenue Sud-Est in the Washington Highlands district of Washington, DC on Friday February 23, 2024. (Sad rouse for the images of the Washington Post / Getty)

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Here are the 10 best metros with the highest share of mortgaged households:

1. Washington, DC – 73.6%
2. Denver, Co. – 72.9%
3. Virginia Beach, Virginie – 70.7%
4. Raleigh, NC – 70.7%
5. San Diego, California – 70.0%
6. Baltimore, MD – 69.4%
7. Atlanta, GA – 69.2%
8. Seattle, Washington – 69.1%
9. Portland, Oregon – 68.5%
10. Richmond, Virginie – 68.3%

Here are the 10 best metros with the highest share of pure and simple owners:

1. Miami – 44.8%
2. Buffalo, NY – 44.2%
3. Pittsburgh, PA. – 44.2%
4. Detroit, me. – 42.3%
5. Tampa, Florida – 42.3%
6. Houston, Texas – 42.2%
7. Tucson, A. – 41.9%
8. San Antonio, Texas – 41.5%
9. Birmingham, al. – 41.0%
10. New York, NY – 40.1%