2 Reasons Why Today’s Mortgage Rate Trend Is Good for Sellers
If you’ve been delaying the sale of your house in anticipation of more favorable mortgage rates, the recent decline in rates brings good news. Mortgage rates have been on a downward trajectory since October, dropping below 7% and staying at this level for over a month now. This shift may be encouraging for those considering a move (see graph below):
While it’s unlikely that mortgage rates will return to the 3% levels observed during the ‘unicorn’ years, there is an anticipation that they will further decrease from their current position in the near future. Dean Baker, Senior Economist at the Center for Economic Research, provides insight into this expectation.
“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-In to Your Current Mortgage Rate
As mortgage rates have substantially decreased over the past few months, you might now sense a reduced commitment to your current mortgage rate. Previously, when rates were higher, relocating to a new home carried the risk of trading a low rate for one approaching 8%.
Fortunately, with the decline in rates, the gap between your existing mortgage rate and the prospective new rate is not as substantial as before. This renders the process of moving more cost-effective compared to just a few months ago. Lance Lambert, Founder of ResiClub, sheds light on this aspect.
“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
According to data from Bright MLS, the top reason buyers have been waiting to take the plunge into homeownership is high mortgage rates (see graph below):
Reduced mortgage rates present the opportunity for buyers to potentially cut costs on their home loans, enhancing the appeal and affordability of homeownership. With the current trend of declining rates, there’s a likelihood that more buyers will feel inclined to reenter the market and proceed with their home purchases. An increase in the number of buyers translates to heightened demand for your house.
Bottom Line
If you’ve been waiting to sell because you didn’t want to take on a larger mortgage rate or you thought buyers weren’t out there, the recent decline in mortgage rates may be your sign it’s time to move. When you’re ready, let’s connect.
