These 10 cities will be the biggest winners following the Federal rate cuts

After years of sky-high mortgage rates, the Federal Reserve finally cut rates on Wednesday at its policy meeting.The Fed doesn’t set mortgage rates, but the two numbers often move in the same direction — and this much-anticipated rate cut should give the sluggish real estate market a much-needed kick-start.Just 11 months ago —vin October 2023 — mortgage rates hit a peak of 7.79% for a 30-year fixed loan, which paralyzed both homebuyers and sellers and severely limited how much buyers could afford.But last week, rates dropped to 6.2%, which is the lowest they’ve been since February 2023.Mortgage rates are expected to continue to ease through the rest of this year and into next year, according to Hannah Jones, Realtor.com senior economic research analyst, in her recent report.If that comes to pass, homebuyers will see a big boost in buying power.If mortgage rates fall to 6%, the typical US buyer would see an additional $9,000 improvement in buying power on average.

If rates fall to 5.5%, the typical buyer would see a $34,000 increase in buying power.“The top 10 metros that stand to see the largest dollar increase in buying power are the country’s highest-priced areas,” says Jones.How much more will buyers in those pricey areas be able to spend on a house if rates fall to 6% or 5.5%? We crunched the numbers below.August median list price: $1,399,000Increase in buying power if rates fall to 6%: $30,100Increase in buying power if rates fall to 5.5%: $110,100August median list price: $1,190,000Increase in buying power if rates fall to 6%: $25,600Increase in buying power if rates fall to 5.5%: $93,600August median list price: $1,050,000Increase in buying power if rates fall to 6%: $22,600Increase in buying power if rates fall to 5.5%: $82,600August median list price: $999,000Increase in buying power if rates fall to 6%: $21,500Increase in buying power if rates fall to 5.5%: $78,600August median list price: $969,000Increase in buying power if rates fa...