CHARLOTTE, N.C. — Economists with the National Association of Realtors predict interest rates will drop to 6% next year. It's not as low as buyers saw during the pandemic, but it's about a full percentage point less than where rates are now.

While less interest is good news in the long run for buyers, lower rates don’t necessarily mean houses are going to go up for sale overnight.

Tiffany Johannes, president of Canopy Realtor Association, says lower interest rates do mean more buyers will enter the market. So if you’re considering buying at the top of the year, she says be strategic.

“You should really be focused on what you can afford today, and perhaps refinance in the future,” she said.

This comes as home sales continue to trend downwards in the Charlotte region, where Johannes is based. According to Canopy Realtor Association, July sales for the region fell 20% year over year. 

What’s made inventory even tighter today is the “golden handcuff effect,” which has homeowners who purchased during the pandemic unwilling to part ways with their historically low interest rates.

“When you have 2.5 - 3.5% interest rates, homeowners are sitting on their properties thinking, 'I’m still growing my equity — I can’t get a better interest rate otherwise.' So, they’re not opening up the opportunity to sell right now,” she said. “Right now, [with interest rates] in the 7s, it’s a little bit tougher for them to make that type of decision.”

But, there’s still hope for buyers looking to jump into the market when interest rates trend downward next year. Johannes says keep an open mind when it comes to location, and find a realtor sooner rather than later to guide you through the ups and downs of the market.