If you’ve been postponing the sale of your home, anticipating a more opportune moment due to seemingly high mortgage rates, the recent downward trajectory in rates brings promising news. Since last October’s peak at 7.79%, mortgage rates have steadily descended and have remained below 7% for over a month.
While we may not be returning to the ‘unicorn’ years with 3% rates, there’s a prevailing expectation that rates will continue their descent in the near future. Senior Economist Dean Baker from the Center for Economic Research sheds light on this, stating:
“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 compelling reasons why the current trend, coupled with the anticipated future decline, is exceptionally advantageous for sellers like yourself.
1. Liberation from Rate Lock-In
With mortgage rates notably lower than just a few months ago, the feeling of being locked into your current mortgage rate may dissipate. In times of higher rates, moving to a new home could potentially mean sacrificing a low rate for one approaching 8%. However, with the current drop in rates, the disparity between your existing mortgage rate and the potential new rate is less pronounced, rendering the prospect of moving more financially feasible. Lance Lambert, Founder of ResiClub, provides insight:
“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.”
2. Surge in Buyer Activity
Data from Bright MLS indicates that high mortgage rates have been the primary deterrent for potential buyers entering the homeownership arena.
Lower mortgage rates translate to potential savings for buyers on their home loans, making homeownership a more enticing and affordable prospect. As rates continue to ease, more buyers are likely to perceive this as a signal to re-enter the market, creating an upswing in demand for homes like yours.
If the reluctance to sell stemmed from concerns about taking on a higher mortgage rate or doubts about buyer interest, the recent decline in mortgage rates serves as a clear indication that the time may be right to make your move. When you’re prepared, consider reaching out to a local real estate agent to navigate the evolving landscape.