2 Reasons Why Today’s Mortgage Rate Trend Is Good for Sellers
If you postpone selling your house and making a move due to concerns about high mortgage rates, the recent decline in rates brings encouraging news for you. Since October, when they peaked at 7.79%, mortgage rates have been on a downward trajectory. In fact, they have remained below 7% for more than a month now, as illustrated in the graph below.
And while they’re not going back to the 3% we saw during the ‘unicorn’ years, they are expected to continue to go down from where they are now in the near future. As Dean Baker, Senior Economist at the Center for Economic Research, explains:
“It also appears that mortgage rates are now falling again. They will almost certainly not fall to pandemic lows, although we may soon see rates under 6.0 percent, which would be low by pre-Great Recession standards.”
Here are two reasons why this recent trend, and the expectation it’ll continue, is such good news for you.
You May Not Feel as locked into Your Current Mortgage Rate
With mortgage rates now considerably lower than they were just a few months ago, you may sense a reduced sense of commitment to your current mortgage rate. In the past, when mortgage rates were higher, relocating to a new home entailed the possibility of exchanging a low rate for one approaching 8%.
Yet, with the recent decline in rates, the gap between your current mortgage rate and the prospective rate for a new home isn’t as substantial as before. This shift makes the prospect of moving more affordable than it was just a few months ago, as elucidated by Lance Lambert, Founder of ResiClub.
“We might be at peak “lock-in effect.” Some move-up or lifestyle sellers might be coming to terms with the fact 3% and 4% mortgage rates aren’t returning anytime soon.”
More Buyers Will Be Coming to the Market
Data from Bright MLS reveals that the primary factor causing prospective buyers to delay entering the realm of homeownership is the presence of high mortgage rates, as illustrated in the graph below:
The decrease in mortgage rates translates to potential savings for buyers on their home loans, rendering the idea of purchasing a home more appealing and cost-effective. With rates on a downward trend, a growing number of buyers may find themselves inclined to reenter the market and proceed with their home purchase. This uptick in buyer activity not only signals increased readiness but also implies heightened demand for your house.
Bottom line:
If you’ve hesitated to sell your property due to concerns about assuming a higher mortgage rate or the perception that potential buyers were scarce, the recent dip in mortgage rates could be the indicator you’ve been waiting for to make a move. When you feel prepared, I’m here to help facilitate the next steps. Let’s connect when you’re ready.
2 Reasons Why Today’s Mortgage Rate Trend Is Good for Sellers
