5 Housing Markets Could See a Surge in Prices if Chairman Powell Cuts Interest Rates
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It begs the question: Which cities stand poised to jump most in price if Federal Reserve Chairman Jerome Powell cuts interest rates?
Kansas City, Missouri
Median home price: $251,923
Median days on market: 7
Throughout the pandemic explosion in property prices, Kansas City kept its cool and remained affordable. Even as other cities around the country have softened over the last six months, Kansas City's inventory remains tight enough that listings last just seven days on average, according to Zillow.
'Midwestern cities like Kansas City have strong economic fundamentals, diversified job bases and home prices that stayed relatively low compared to coastal hubs,' explains Fred Loguidice, founder of Sell My House Fast Ohio. 'A small drop in rates would significantly improve affordability, setting off a torrent of would-be buyers waiting in the wings.'
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Spokane, Washington
Median home price: $404,401
Median days on market: 11
Inventory remains tight enough in Spokane that more homes sell over asking price (38.1%) than under it (32.2%), per Zillow. Compare that to the national averages of 29.5% and 50.9% respectively, and widening.
More homes selling over asking price indicates a market with plenty of pent up demand: Buyers waiting for an opportunity to pounce.
Minneapolis, Minnesota
Median home price: $337,547
Median days on market: 14
That imbalance looks even more stark in favor of sellers in Minneapolis, where an impressive 51.5% of listings sell above asking price. Compare that to just 30.9% of listings selling under asking.
'Many buyers, particularly first-time homebuyers, have not been able to afford monthly payments at a 7% or more mortgage rate,' adds Loguidice. 'Fannie Mae anticipates mortgage rates could level out at about 6.2% by the end of 2026, and that would be enough to put many of these buyers back into the market.'
Allentown, PA
Median home price: $307,836
Median days on market: 7
Well positioned between Philadelphia and New York City, Allentown has increasingly served as a commuter haven for workers who only need to report to the office in person periodically.
Just 28% of listings in Allentown sell below asking price, to give a sense for the strong demand. Leon Fisher, real estate advisor at Zook Cabins, sees a housing market poised for a surge in prices.
'Prices have increased 3.5% in Allentown despite high mortgage rates — seven times the national rate of 0.5% — which shows how strong demand already is,' Cabins said. 'If rates drop, the market would strain in release.'
Worcester, MA
Median home price: $435,061
Median days on market: 9
A similar dynamic is playing out in Worcester, where a whopping 59.5% of listings sell over asking price.
'Worcester sits just outside Boston, with a nearly $300,000 gap in home prices,' adds Fisher. 'That affordability gap has long made it a commuter hub and spillover market when Boston overheats. Inventory is tight, the price gap is wide and the city is already on the map for affordability-focused movers. The setup is there, it just needs a trigger.'
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This article originally appeared on GOBankingRates.com: 5 Housing Markets Could See a Surge in Prices if Chairman Powell Cuts Interest Rates
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