With talk of interest rate cuts gaining momentum, one of the most common questions we're hearing is:

“What will happen to the real estate market when rates start to fall?” It’s a great question — and the answer is more nuanced than you might think.

The Current State: A Market in Limbo

Right now, millions of homeowners are what we call “rate-locked” — holding onto ultra-low mortgages secured during the pandemic (often between 2.5%–4%). These homeowners are reluctant to sell and re-enter the market at today’s 6.5%–7% rates.

As a result, housing inventory remains tight, pushing prices higher and keeping many would-be buyers and sellers on the sidelines.

What Happens If Rates Drop?

1) More Sellers May Enter the Market

Homeowners waiting to make a move may finally list their homes when rates fall closer to 5% or below. This could cause a notable increase in housing supply.

2) Demand Will Likely Surge Too

Buyers who were priced out due to high mortgage payments will come back, along with investors and move-up buyers. We could see a strong rebound in transaction volume.

3) Supply vs. Demand — A Delicate Balance

If new listings flood the market faster than buyers return, we may see price stabilization or modest corrections.

But if demand outpaces supply (as many experts believe), prices could continue to rise, just at a more sustainable pace than the pandemic surge.

Likely Scenario: A More Balanced Market

While we don’t anticipate a “crash,” we do expect shifts that reward those who plan ahead. Local conditions will vary, and timing, financing, and long-term goals will be critical for both buyers and sellers.

Why This Matters to Your Broader Financial Plan

Real estate is often one of the largest assets in a household’s balance sheet — and how you handle transitions like buying, selling, refinancing, or relocating can have ripple effects across your retirement, tax strategy, and investment portfolio.

Let’s Strategize — Before the Market Moves

Whether you're thinking about downsizing, buying a second home, relocating, or unlocking home equity — it’s time to align your real estate strategy with your overall financial goals.

At HealthHarbor, we specialize in helping clients prepare for big financial transitions like this with a clear, personalized plan that reflects your full financial picture.

Schedule your complimentary strategy session today.

Let’s review your goals, assess the impact of future rate changes, and build a forward-looking plan that positions you for long-term success — no matter where the market goes.

When the rate tide turns, a coordinated plan can help you sail steadily toward retirement. Schedule your complimentary financial health checkup to get started.