Homebuyers Are Getting Used to the New Normal
If you're thinking about selling your house, it's crucial to be aware of the current state of the housing market. Fortunately, one positive development is that homebuyers are adjusting to the current mortgage rates and seeing them as the new normal.
To gain a deeper understanding of recent trends in mortgage rates, check out the graph below which displays the trend for the 30-year fixed mortgage rate from Freddie Mac since October of last year. As you can see, rates have remained relatively stable, hovering between 6% and 7% for the past nine months.
According to Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), mortgage rates play a significant role in buyer demand and, by extension, home sales. Yun highlights the positive impact of 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 seller, it's great news to hear that the housing market is steady right now. This means that there are active buyers looking to purchase homes. Let's take a closer look at how the demand has been affected by mortgage rates recently.
Last year, there was a sudden surge in mortgage rates, which rose from around 3% to 7%. This unexpected increase caused many potential homebuyers to reconsider their plans. However, as time passed, people have become more familiar with the current mortgage rates and have realized that the historically low rates of the past few years are no longer available. According to Doug Duncan, SVP and Chief Economist at Fannie Mae, there has been a shift in perspective among buyers.
“. . . consumers are adapting to the idea that higher mortgage rates will likely stick around for the foreseeable future.”
According to a recent survey conducted by Freddie Mac, 18% of respondents have expressed their intention to purchase a home within the next six months. This indicates that almost one in every five people surveyed plan to buy a house in the near future. Hence, it is apparent that buyers are preparing to be active in the coming months.
It is important to note that mortgage rates are not the only factor that influences buyer demand. Regardless of the current mortgage rates, people will always have reasons to move, such as job relocation, household changes, or personal motivations. As a seller, you can be confident that there is a market for your house today, and the demand is still strong as buyers settle into the current rates.
Bottom Line
The current perception of mortgage rates among buyers is changing, as they become accustomed to the new normal. The stability of rates has led to a robust demand from buyers and a steady flow of home sales. Let's connect so that we can list your house on the market and attract potential buyers.
