It’s critical to be aware of what to anticipate in the current housing market before making the decision to sell your home. Homebuyers are adjusting to the current mortgage rates and coming to accept them as the new normal, which is a positive trend at the moment.
The graph below depicts the trend for the 30-year fixed mortgage rate from Freddie Mac since last October in order to better understand what has been going on with mortgage rates recently. As you can see, rates have been fairly stable over the previous nine months, ranging between 6% and 7%:
Mortgage rates have a significant impact on buyer demand and, consequently, home sales, according to Lawrence Yun, Chief Economist at the National Association of Realtors (NAR). Yun emphasizes the advantages of stable rates as follows:
“Mortgage rates heavily influence the direction of home sales. Relatively steady rates have led to several consecutive months of consistent home sales.”
Hearing that home sales are steady at the moment is encouraging for sellers. It indicates that there are people looking to buy homes right now. Here is some additional background information on how recent changes in mortgage rates have affected demand.
Many prospective buyers experienced some sticker shock and postponed their plans to buy a home when mortgage rates sharply increased last year, rising from about 3% to 7%. That initial shock, though, has subsided with time. The record-low rates of recent years are behind us, and buyers have grown accustomed to the current mortgage rates. As Doug Duncan, SVP and Chief Economist at Fannie Mae, puts it:
“. . . consumers are adapting to the idea that higher mortgage rates will likely stick around for the foreseeable future.”
In fact, according to a recent Freddie Mac survey, 18% of respondents say they’re likely to buy a home in the next six months. That indicates that almost one in five respondents to the survey intend to purchase a home soon. And that confirms that buyers intend to be active in the upcoming months.
Mortgage rates aren’t the only thing influencing buyer demand, of course. People will always need to move for a variety of reasons, including job relocation, household switching, and other personal factors, regardless of where mortgage rates are at. Selling your home today gives you the assurance that there is a market for it. And as buyers adjust to the current rates, the demand is actually quite strong.
