Rates Just Pushed Delco Into a Slower Fall Season, Here's What That Actually Means for You

By Ben Hill, Premier Property Sales and Rentals

Back in June we were talking about the busiest month Delaware County had seen in a year and a half. That streak is over. Rates climbed from the mid 6% range into the high 6% range over the summer, and the market is starting to feel it. If you've been sitting on the sidelines waiting for a little breathing room, this is probably it.

Nationally the shift is a lot sharper than what we're seeing here. Redfin reported that the number of active homebuyers hit a record low in July, while sellers barely budged, leaving sellers outnumbering buyers by 51.3% across the country, just shy of the all time record set back in December. Delco isn't there yet, and the data backs that up. But rates don't stop at the county line, and the same pressure pushing buyers to the sidelines nationally is starting to show up here too.

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The Short Version

The 30 year fixed rate averaged 6.67% as of mid August, according to Freddie Mac, up from 6.58% a year ago and well above where things sat back in June. That's not a small move. On a $400,000 loan, the difference between a rate of 6.5% and 6.8% works out to about $80 a month, and once you stack that on top of prices that already climbed all spring, a real number of buyers are getting squeezed out of what they can afford.

June was Delco's busiest month for signed contracts in a year and a half. We don't have Bright MLS numbers finalized for July and August yet, but every signal points the same direction the rest of the country is moving: a cooling off after a hot spring and early summer. That's normal for fall anyway. This year rates are adding real weight to the usual seasonal slowdown.

Why Rates Are the Whole Story Right Now

Rates sat in the mid 6% range for most of the spring and summer, which is part of why buyers kept moving fast even as prices climbed. That's changed. The 30 year fixed has been running closer to 6.6% to 6.7% through August, and jumbo loans are pushing near 6.8%. Whether the Fed moves at its September meeting is still an open question, and until there's more clarity there, don't expect rates to drop meaningfully before the end of the year.

In plain terms, fewer buyers can qualify for the home they want at the price they want, and the ones who can qualify aren't in a rush to compete for it. That's the mechanism behind pretty much every number in this post.

What's Happening Nationally

Redfin's latest numbers are a good gut check on where things are headed. Active buyers fell to about 967,000 in July, the lowest number on record, while sellers held at roughly 1.46 million. That gap, 51.3% more sellers than buyers, is just short of December's record and up sharply from 47.9% in June. Nearly 80% of the major metros Redfin tracks are now buyer's markets by their definition, led by places like Miami, Nashville, and Houston.

Here's the part that actually matters for us: only six metros nationwide are still holding as seller's markets, and Montgomery County, right next door to us, is one of them. That tells you the pullback hitting Miami and Nashville hasn't hit greater Philadelphia the same way. Our area has had a supply problem for years since new construction never caught up with demand, and that's still working in sellers' favor here even as rates cool things off elsewhere.

What This Looks Like in Delco

We're not calling this a buyer's market. Inventory here has been tight for years and that doesn't reverse in one summer of higher rates. What we do expect heading into fall:

  • Days on market creeping back up from the 21 to 22 day pace we saw in May and June
  • Fewer multiple offer situations, especially on homes priced at or above where comps were setting records this spring
  • More price reductions on listings that got a little aggressive with their number back in June
  • Sellers who need to move still getting deals done, just with a little more back and forth than they got used to this spring

The towns that led the pack this summer, Media, Swarthmore, Haverford Township, Springfield, and Radnor, are also the ones best positioned to hold up through a slower fall. Strong schools and steady demand tend to cushion a rate driven slowdown better than anywhere else in the county. Places like Upper Darby, Chester, and Lansdowne, where value has always been the draw, are where buyers will likely find the most room to negotiate.

What To Expect Through the Rest of the Year

Rates should stay in the mid to high 6% range barring a surprise from the Fed. Prices aren't going to crater. Delco's inventory situation won't allow that. But expect flatter price growth than what we saw this spring. New listings typically slow down heading into fall anyway, and this year that seasonal dip is layering on top of a real rate driven pullback in buyer activity nationally, even if it hasn't fully landed here.

What This Means For You

If you're buying:

  • You have more room to negotiate than you've had all year. Fewer buyers competing for the same house means you can ask for closing help, repairs, or a price that actually reflects what the home is worth, not what three other offers pushed it to
  • Don't wait for a rate that may not come. Rates have held in the mid to high 6% range for months with no clear catalyst to bring them down before year end. If you buy now and rates ease later, you can always refinance. You can't retroactively negotiate a house you didn't buy
  • Get pre-approved and know your real number before you start looking. A slower market still moves fast on the right house, priced right, in a good school district

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If you're selling:

  • Price it to where the market actually is right now, not where it was in June. Overpricing in a slower fall gets punished faster than it did this spring
  • Expect a slightly longer runway. Days on market are creeping back up, and that's not a reflection on your home, it's the rate environment
  • Presentation and pricing matter more than ever when buyers have options. The homes that sold above asking this summer weren't winning on price alone, and that's even more true now

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Bottom Line

Rates climbing into the high 6% range are slowing things down nationally, and fall in Delco is going to feel different than the spring and summer did, even if we're not seeing the kind of imbalance hitting places like Miami or Nashville. For sellers, that means adjusting expectations and pricing to the current market, not the one from three months ago. For buyers, it means the leverage you didn't have in April is starting to show up now, and a rate you lock in today isn't the rate you're stuck with forever. If the math works for you now, waiting for a better rate that may not show up is usually the more expensive bet.

Whether you're trying to find the right house while there's less competition or you need a real read on what your home is worth in today's market, the team at OwnDelco can walk you through where things actually stand. Explore current homes for sale in Delaware County or find out what your home is worth today.