Why Even a Small Drop in Mortgage Rates Can Reignite the Market

When mortgage rates shift—even slightly—it doesn’t just affect what buyers can afford. It affects how confident they feel.

Across the South Shore, Cape Cod, and Greater Boston real estate markets, we’ve seen a consistent pattern: when rates dip, buyer confidence tends to spike. Whether you’re searching for a home in Hingham, MA or along the Cape, even modest rate changes can unlock opportunity.

Here’s a recent example: when rates dropped from just over 7% to 6.67%, a buyer with a $4,000/month budget gained approximately $22,000 more in purchasing power.

And for buyers eyeing homes in the $800,000 range—a common price point in areas like Hingham, Norwell, and Cohasset—that same rate drop translated to around $230 per month in savings on their mortgage payment. Over the course of a year, that’s nearly $2,800 in savings—a meaningful difference for many buyers who’ve been waiting on the sidelines.

More importantly, lower rates often lead to:

• Increased buyer activity

• Faster showing requests

• Quicker decisions

• Fewer concessions for sellers

In our work throughout Hingham, the South Shore, Cape Cod, and Boston, we’ve seen how rate shifts—even small ones—can quickly change the pace of the market. Buyers start re-engaging, sellers see more activity, and deals start moving faster.

If mortgage rates trend downward in Q4 2025 as some predict, expect a wave of renewed buyer interest.