The Real Estate Market is Shifting
What Home Buyers and Sellers Need to Know Now!
This week, the Federal Reserve cut the Fed Funds Rate by one-quarter of a percent — a move many in the market expected. What’s interesting, though, is how that decision doesn’t always translate to lower mortgage rates. In fact, mortgage rates sometimes tick up immediately after a Fed cut.
That said, rates have been trending down since July and are roughly half to three-quarters of a percent lower than earlier this year. That’s welcome news for buyers and sellers alike.
When the Fed adjusts rates, it affects short-term borrowing first — things like credit cards and Home Equity Lines of Credit (HELOCs). Because most HELOCs are tied directly to the Prime Rate, they move in lockstep. When the Fed cuts, the Prime Rate follows the next day. So, if you have a HELOC, expect to see your rate drop soon… and likely more over the coming year.
Consumer borrowing costs are easing too, which means more money in people’s pockets and lower expenses for businesses that rely on lines of credit. That’s a healthy sign for both Main Street and Wall Street.
Now let’s zoom in locally — right here in Lancaster and South-Central PA.
Inventory Is Rising
After months of painfully tight supply, inventory is creeping up. We’re sitting around 1.5 months of available homes, compared to just 1 month not long ago. For reference, anything under 4 months is considered a seller’s market. Four to six months is balanced; six or more is a buyer’s market. So yes, still a seller’s market — but easing, which is healthy.
Days on Market Are Growing
Homes are staying active longer — from about 15 days a few months ago to roughly 25 days now, according to LCAR. That extra time gives buyers a real shot to view, compare, and act without the mad scramble. It also opens doors for those using FHA, VA, or Rural Housing financing — buyers who were nearly shut out before.
Price Reductions Are Up
Over 1,000 properties in September saw price adjustments. That’s sellers responding to the new pace of the market. It’s a signal of realism — and opportunity — for today’s buyers.
Rates Are Lower Than a Year Ago
Compared to last fall, mortgage rates are down about one full percent. On a $300,000 loan, that’s roughly $200 less per month, which can mean a more affordable payment… or more home for the same payment.
Bottom Line
We’re still in a seller’s market, but it’s loosening. More inventory. Longer listing times. Slightly lower rates. The same factors that sidelined buyers the past two years are beginning to shift — and that’s encouraging news.
To Your Success,
Ken Pederson and Your Home Buying Team at Fairway Home Mortgage
You can watch our video post with charts and graphics by clicking on this link: https://youtu.be/KTWFJRt-dQM
When you have questions about the market, buying a home or getting Pre-Approved with the FAIRWAY Advantage Pre-Approval, DM me or reach out to our office at 717-431-9299.
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