Homebuyers are Getting Used to a New Normal

It’s important to understand what to expect from the current housing market before you decide to sell. The graph below shows the trend of the 30-year fixed rate mortgage from Freddie Mac over the past nine months. As you can see, the rates have been between 6 and 7 percent consistently for the last nine months. According to Lawrence Yun (chief economist at the National Association of Realtors), mortgage rates are a major factor in home sales and buyer demand. Yun highlights that stable rates have a positive impact on home sales: “Mortgage rate trends heavily influence the direction of the market.” The relatively stable rates have led to a number of consecutive months with consistent home sales. It means that buyers are actively buying homes. Here’s some more information on how recent mortgage rates have affected demand. Many potential buyers were shocked by the dramatic increase in mortgage rates last year. They went from 3% to 7%. As time passed, the initial shock faded. The current mortgage rates have become more familiar to buyers, and they have accepted the fact that the record low rates of the past few years are over. Doug Duncan, SVP, Chief Economist, Fannie Mae says: ” . . Consumers are adjusting to the idea that mortgage rates will remain high for the foreseeable. A recent survey by Freddie Mac revealed 18% of respondents said they were likely to purchase a home within the next six-months. Nearly one in five people who were surveyed said they plan to purchase a home soon. This shows that buyers plan to be active over the next few months. Mortgage rates aren’t a sole factor in determining buyer demand. People will always move for a variety of reasons, including job relocation, changing homes, or other personal motivations. You can be confident as a seller that there is a demand for your home today. The demand for houses is strong, as buyers adjust to the current rates. Bottom LineThe perception of mortgage rates by buyers is changing. They are becoming accustomed to the new norm. Consistent home sales and strong buyer demand are a result of stable rates. Connect with a local agent to put your home on the market.

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