What lower mortgage rates mean for Metro Detroit
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The interest rate cut that Metro Detroit home buyers were waiting for finally arrived, but experts say it will take a bigger drop to revive the sluggish market.
The big picture: Local home sales fell more than 11% in August compared with the same time last year, probably due to the wait-and-see strategy many buyers and sellers adopted on interest rates.
Zoom in: Mortgage rates are hovering around 6% after this month's interest rate cut, and Danielle Hale, chief economist at Realtor.com, tells Axios that she doesn't expect them to drop below that level this year.
How it works: The Fed's rate cut influences future mortgage interest rates.
- Other factors, such as the jobs market and the overall health of the U.S. economy, also are factored in, the Free Press reported last week.
Between the lines: Easing mortgage rates offer house hunters some relief.
- Some buyers who still recall the ultra-low rates below 3% from a few years ago might want to keep waiting for lower rates.
- Near-6% mortgages, however, make more sense for those who can't wait to move or for homeowners considering refinancing for lower monthly payments.
What they're saying: Borrowers with good credit are seeing average rates in the mid- to low-6% range, Chris Sbonek, mortgage broker and owner of Mitten Mortgage Lending in Wyandotte, told the Free Press.
- "Everyone is not walking away with a 5-something right now," he told the Freep, "but we do have borrowers, ones with the really good equity, ones with really good credit, sliding into the high 5 percents right now."
The bottom line: Record U.S. home prices and low inventory continue to sideline many shoppers. Plus, homeowners remain reluctant to give up their less expensive mortgages.
- Nearly 86% of U.S. mortgage holders have a rate under 6%, per Redfin.