Top U.S. Metros to Watch as Mortgage Rates Fluctuate

A new study from Realtor.com® highlights the major U.S. real estate markets likely to see changes as a result of the Federal Reserve’s rate cut last month. 

In September, the 30-year fixed mortgage rate dropped to its lowest level since February 2023. 

Following the Fed’s announcement in September, Realtor.com® predicted that mortgage rates would stay in the low 6% range through the end of 2024, with further declines resulting in high-5% rates by spring 2025. 

Since then, following the latest jobs report, the 30-year fixed mortgage rate has once again increased past 6.50% and has continued to rise. 

As rates fluctuate in response to key economic indicators, metros with the highest shares of owner-occupied homes with a mortgage will feel the most impact. 

Having a mortgage with a low interest rate is a fantastic benefit to existing homeowners, but sometimes being in a great position can limit your options. Although mortgage rates have eased, market rates continue to exceed current rates for most homeowners keeping them locked in ‘golden handcuffs. In markets like Washington D.C. and Denver, Colorado, where almost 75% of owner-occupied homes have a mortgage, changes in market rates are likely to factor into buying and selling decisions for more homeowners. As mortgage rates decline, real estate sales activity is expected to pick up in these areas.

Danielle Hale

Realtor.com® Chief Economist

Impact of Mortgage Rate Reductions on Key U.S. Markets

While much depends on how mortgage rates respond to the Fed rate cut in the longer term, the reduced rate is expected to have a significant impact on real estate markets with the highest mortgage utilization—led by these five: 

1. Washington-Arlington-Alexandria, DC-VA-MD-WV (74.7% of owner-occupied homes have a mortgage)
2. Denver-Aurora-Lakewood, CO (72.4%)
3. Raleigh-Cary, NC (72.0%)
4. Virginia Beach-Norfolk-Newport News, VA-NC (71.0%)
5. Portland-Vancouver-Hillsboro, OR-WA (69.8%)

In the top two markets—Washington, D.C., and Denver, CO—more than 70% of owner-occupied homes have outstanding mortgages, making them especially sensitive to changes in mortgage rates. 

As those rates drop to the low 6% range (hopefully by year’s end) and potentially the high 5% range by next spring, home sales activity is likely to increase as more buyers and sellers re-enter the market. 

For the sake of transparency, we’re not making a prediction here about mortgage rates. We’re presenting the data shared by both Realtor.com and Mortgage News Daily to highlight the impact of rate cuts, together with other factors influencing mortgage rates, on markets with the highest shares of mortgage utilization. 

And as we’ve seen, those factors can cause mortgage rates to change direction just as economists are revising their rate predictions for the year. 

Metros with Highest Share of Outright Homeownership

It stands to reason that metros with the highest shares of homeowners who own their homes outright are less likely to feel shock waves from September’s fed rate cut. Metros fitting that description are led by these five metros in the South and Northeast: 

1. New Orleans-Metairie, LA (45.8% of owner-occupied homes do not have a mortgage)
2. Buffalo-Cheektowaga, NY (45.2%)
3. Pittsburgh, PA (45.2%)
4. Miami-Fort Lauderdale-Pompano Beach, FL (43.8%)
5. Tampa-St. Petersburg-Clearwater, FL (42.9%)

Age and Homeownership Trends

Markets with higher homeownership rates tend to have a larger share of owner-occupied homes without a mortgage—especially among homeowners aged 65 and above. 

Older homeowners are also more likely to benefit from equity growth, allowing them to refinance or sell their homes and downsize without needing to take on new mortgage debt. 

Read the full news release for more information, including mortgage utilization data for the 50 largest U.S. metros.