Experts anticipating a cut of the Federal Reserve's benchmark interest rate this fall think it could stabilize the housing market's wild ride of the last few years.
"The next 12 months is going to be better for buyers than what they've experienced the past couple of years," said Greg McBride, chief financial analyst with Bankrate.
It's welcome news for Andrew Rayas, a real estate agent in Southern California, one of the hottest housing markets in the country. He thinks the rate cut could encourage more first-time buyers to get into the market and more sellers to list their homes, increasing inventory in a starved market.
"There's more people that are motivated to sell, or more [who are] confident thinking, 'Hey, if we were to sell our place here, we know we could get into somewhere else,'" he said.
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An inventory increase could put power in buyers' hands; they're coming off a brutal 2023 when inventory was so low the National Association of Realtors says existing home sales were at their lowest since 1995.
It has yet to get better. The group says June 2024 saw the median sale price for a home hit its highest level ever recorded.
Yet Rayas sees early signs of that turning around.
"As of right now I have the most sellers I'm working with ever in my career in real estate," he said.
"The nuance that's significant is how fast do mortgage rates come down?" McBride said. "If mortgage rates drop really sharply, that's likely to produce the type of surge in demand that could push prices back up, offsetting some of that benefit."
