General Real Estate News January 19, 2024

Advantages for Sellers: Unpacking the Positive Shift in Today’s Mortgage Rate Trends

If you’ve been delaying the sale of your house due to concerns about high mortgage rates, the recent decline in rates brings exciting news for you. Since October of last year, when rates peaked at 7.79%, they have steadily decreased and have been below 7% for over a month now.

While they may not return to the exceptionally low levels seen during the ‘unicorn’ years at around 3%, experts anticipate a further decrease in the near future. Dean Baker, Senior Economist at the Center for Economic Research, suggests that mortgage rates are likely to fall again, possibly going below 6.0%, which would be considered low by pre-Great Recession standards.

Here are two compelling reasons why this trend and the expectation of further decline are positive developments for homeowners:

  1. Reduced Feeling of Mortgage Rate Lock-In: With mortgage rates already significantly lower than a few months ago, homeowners may not feel as tied to their current mortgage rate. Previously, moving to a new home could mean sacrificing a low rate for one closer to 8%. However, with rates on the decline, the difference between the current mortgage rate and the potential new rate is not as substantial. This makes moving more affordable, as explained by Lance Lambert, Founder of ResiClub, who notes that we might be at the peak of the “lock-in effect.”
  2. Increased Buyer Interest: Data from Bright MLS indicates that high mortgage rates have been a key factor preventing potential buyers from entering the housing market. Lower mortgage rates make home loans more cost-effective, enticing more buyers to consider homeownership. With rates easing, more buyers are likely to feel ready to re-enter the market, leading to increased demand for houses.

In Conclusion: If you’ve been hesitating to sell your house due to concerns about higher mortgage rates or a perceived lack of buyers, the recent decline in rates could be the signal you’ve been waiting for. When you’re ready to make your move, it’s advisable to connect with a local real estate agent who can guide you through the process.