N
ew Orleans is expected to see the least impact from the Federal Reserve's decision to lower borrowing rates. In contrast, Washington D.C., Denver, and Raleigh, North Carolina are projected to experience significant changes in their real estate markets. According to a recent Realtor.com report, areas with high percentages of homeowners with mortgages will be most affected by the rate cuts.

    In Washington and Denver, nearly 75% of owner-occupied homes have a mortgage, making them particularly sensitive to lower rates. However, the impact on these markets will vary depending on how homeowners utilize their mortgages. Realtor.com economists predict that mortgage rates will remain in the low 6% range through the end of 2024 and decline further to the high 5% range by next spring.

    This decrease could stimulate borrowing and homebuying activity as more buyers re-enter the market. Realtor.com chief economist Danielle Hale notes that changes in market rates are likely to influence buying and selling decisions for homeowners in markets with high mortgage shares, such as Washington-Arlington-Alexandria, D.C., Denver-Aurora-Lakewood, Colorado, and Raleigh-Cary, North Carolina.

    Despite lower rates, many homeowners will remain in "golden handcuffs" due to their locked-in mortgage rates. The following metros are projected to see the most changes:

    * Washington-Arlington-Alexandria, D.C. – 74.7%

    * Denver-Aurora-Lakewood, Colorado – 72.4%

    * Raleigh-Cary, North Carolina – 72%

    On the other hand, markets with higher shares of outright ownership are expected to be less affected by the rate cuts. The following metros have the highest share of homes without a mortgage:

    * New Orleans-Metairie, Louisiana – 45.8%

    * Buffalo-Cheektowaga, New York – 45.2%

    * Pittsburgh, Pennsylvania – 45.2%