Mortgage rates are dropping: What it means for Indianapolis homeowners and homebuyers

Homeownership is more than just a lofty American dream — it’s how many can build generational wealth. For the Black community, 90% of wealth gains come from homeownership, meaning that owning a home continues to be a crucial method for Black households to build and accumulate wealth.& & And while the Indianapolis housing market has been very competitive — with home prices up 3.6% year-over-year in July 2024, according to Redfin — home buyers who have been waiting on the sidelines for prices to become more affordable might see some relief soon. The Federal Reserve (the Fed), the U.S.’ central bank that dictates interest rates, continues to indicate that a potential rate cut is on the horizon. Not only can this impact affordability for prospective buyers, but it could be advantageous for current homeowners that are locked into higher interest rates. But what does this all mean? Elgin Wren, Chase Community Home Lending Advisor in Indianapolis answers some of your questions as it relates to prospective homebuyers and homeowners: What role do interest rates play in buying a home? Mortgages respond to market conditions, including the Fed’s monetary policy. As interest rates climb, so does the interest on new mortgages...