If youve been holding off on selling your house tomake a movebecause you felt mortgage rates were too high, their recent downward trend is exciting news for you. Mortgage rates have descended since last October when they hit 7.79%. In fact, theyve beenbelow 7%for over a month now (see graph below):
And while theyre not going back to the 3% we saw during theunicorn years, they are expected to continue togo downfrom where they are now in the near future. As Dean Baker, Senior Economist at theCenter for Economic Research,explains:
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 theexpectationitll continue, is suchgood newsfor you.
You May Not Feel as Locked-In to Your Current Mortgage Rate
With mortgage rates already significantly lower than they were just a few months ago, you may feel less locked-in to the current mortgage rate you have on your house. When mortgage rates were higher,movingto a new home meant possibly trading in a low rate for one up near 8%.
However, with rates dropping, the difference between your current mortgage rate and the new rate youd be taking on isnt as big as it was. That makesmovingmore affordable than it was just a few months ago. As Lance Lambert, Founder ofResiClub,explains:
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 arent returning anytime soon.
More Buyers Will Be Coming to the Market
According todatafromBright MLS, the top reason buyers have been waiting to take the plunge into homeownership is high mortgage rates (see graph below):
Lower mortgage rates mean buyers can potentially save money on their home loans, making the prospect of purchasing a home more attractive and affordable. Now that rates are easing, more buyers are likely to feel theyre ready to jump back into the market and make their move. And more buyers mean more demand for your house.
Bottom Line
If youve been waiting to sell because you didnt want to take on a larger mortgage rate or you thought buyers werent out there, the recent decline in mortgage rates may be your sign its time to move. When youre ready,lets connect.
