2 Reasons Why Today’s Mortgage Rate Trend Is Good for Sellers

If you've been delaying the sale of your house due to concerns about high mortgage rates, the recent decline in rates brings promising news for you. Mortgage rates have been on a downward trajectory since last October when they peaked at 7.79%. In fact, they have remained below 7% for over a month now (refer to the graph below):

Although mortgage rates aren't reverting to the 3% levels observed during the 'unicorn' years, projections indicate that they will continue to decrease from their current levels in the foreseeable future. Dean Baker, Senior Economist at the Center for Economic Research, elaborates on this trend:

“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 the anticipation of its continuation, is such positive news for you.

You May Not Feel as Locked-In to Your Current Mortgage Rate

With mortgage rates now considerably lower than they were just a few months ago, you might perceive less constraint regarding the current mortgage rate on your house. Previously, when mortgage rates were higher, transitioning to a new home potentially entailed exchanging a low rate for one nearing 8%.

However, with rates decreasing, the disparity between your current mortgage rate and the prospective new rate is not as substantial as before. This renders moving more financially feasible than it was only a few months ago. Lance Lambert, Founder of ResiClub, provides insight into this shift:

“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.”

More Buyers Will Be Coming to the Market

According to data from Bright MLS, the top reason buyers have been waiting to take the plunge into homeownership is high mortgage rates (see graph below):

Decreased mortgage rates offer buyers the opportunity to potentially reduce their expenses on home loans, rendering the idea of purchasing a home more appealing and cost-effective. As rates continue to decrease, more buyers are inclined to perceive themselves as ready to reenter the market and proceed with their plans. This increased buyer activity translates to higher demand for your house.

Bottom Line

If you've been hesitating to sell because you were apprehensive about accepting a higher mortgage rate or you believed there weren't enough buyers in the market, the recent decrease in mortgage rates might serve as your signal to take action. When you're prepared, let’s connect.