Should I Wait for Mortgage Rates To Come Down Before I Move?
If you’re considering making a move, you might be contemplating whether it’s wise to sell now or wait until mortgage rates decrease. Below is some information that might assist you in making that decision.
In the realm of real estate, there exists a well-established correlation between mortgage rates and the demand from buyers. Typically, when rates are high, buyer demand tends to decrease. This phenomenon occurs because some individuals who are considering a move may hesitate to commit to a higher mortgage rate for their next property. Consequently, they opt to postpone their plans.
However, when rates begin to decline, the dynamics shift. The situation transitions from one of limited or weakened demand to one characterized by robust or heightened demand. This shift occurs because a significant portion of potential buyers who refrained from entering the market when rates were higher are now inclined to reenter and pursue their housing goals. The graph provided below offers a visual representation of this relationship and illustrates our current position in the market.
As Lisa Sturtevant, Chief Economist for Bright MLS, explains:
“The higher rates we’re seeing now [are likely] going to lead more prospective buyers to sit out the market and wait for rates to come down.”
Why You Might Not Want To Wait
If you’re pondering the implications for a move, here’s the key insight: experts anticipate that mortgage rates will still decrease this year, albeit slightly later than initially anticipated.
As rates decline, more individuals will reenter the market, resulting in heightened competition among buyers when you are ready to purchase your next home. Waiting may potentially elevate the stress of your move, as increased demand could trigger more instances of multiple offers and quicker price escalations.
However, if you’re prepared and capable of selling now, it might be advantageous to seize the opportunity. Doing so allows you to move ahead of the competition, offering you a window to proceed before demand intensifies.
Bottom Line
If you’re thinking about whether you should wait for rates to come down before you move, don’t forget to factor in buyer demand. Once rates decline, competition will go up even more. If you want to get ahead of that and sell now, let’s chat.
