Before you decide to sell your house, it’s important to have an understanding of the current housing market. One trend we are noticing is that homebuyers are starting to adapt to today’s mortgage rates and appear to be accepting them as the new normal. Looking at the graph below, you can see the trend for the 30-year fixed mortgage rate from Freddie Mac since last October. You’ll notice that interest rates have now been between 6% and 7% pretty consistently for the past nine months:
According to the Chief Economist at the National Association of Realtors (NAR), Lawrence Yun, mortgage rates play a significant role in not only buyer demand but also home sales. Yun highlights the positive impact of consistent, stable rates:
“Mortgage rates heavily influence the direction of home sales. Relatively steady rates have led to several consecutive months of consistent home sales.”
As a potential seller, hearing that home sales are consistent is good news! This means that buyers are out there looking and actively purchasing homes.
When we saw mortgage rates surge dramatically last year, increasing quickly from roughly 3% to 7%, many potential homebuyers felt a bit of sticker shock and decided to hold off on their purchasing plans to see what the rates would do. However, as time has passed, that initial shock has worn off. Buyers have become more accustomed to current mortgage rates and have accepted that the record-low rates of the last few years are behind us. As Doug Duncan, SVP and Chief Economist at Fannie Mae, says:
“. . . consumers are adapting to the idea that higher mortgage rates will likely stick around for the foreseeable future.”
A recent survey by Freddie Mac reveals 18% of respondents say they’re likely to buy a home in the next six months. That means nearly one out of every five people surveyed plan to buy in the near future. That goes to show buyers are planning to be active home shoppers in the months ahead.
Of course, mortgage rates aren’t the sole factor affecting buyer demand, and no matter where mortgage rates stand, people will always have reasons to move, whether it’s for job relocation, changing households, or any other personal motivation. Bottom line? The way homebuyers perceive today’s mortgage rates is shifting, and as a seller, you can feel confident there is a market for your house today.