Are you stuck in the past?

I’m asked often, “When is a good time to put my home on  the market?” and “When will the interest rates go down.”  Obviously, that depends on a number of factors. But that question really stems on interest rates for most sellers.

According to Freddie Mac, as far back as 2011 mortgage rates were 4% to 5%. In October 2018, buyers were glad to see the 5% mortgage rates begin to fall. Over the next 3 years, that rate dropped to 2.77% just for a minute. This was the lowest rate ever and will more than likely never be seen again.

The Northwest MLS shows that during that time, Buyers had record low inventory of homes from which to choose. They were stepping on each other’s toes to see homes. Because we saw multiple offers on nearly every home, Buyers tried everything to win the offer battle. Prices during that time increased at an unbelievable rate.

From March to October of 2022, interest rates shot up from 4% to 7.63%. The fastest rate increase in history. The supply of resale homes remained low and new construction was hard to find. I guess when it comes down to it, it’s all about desire, supply, and demand. Because, even with the rise in prices, the low inventory and the 7% interest rates, homes were selling and selling quickly.  

Back to homeowners and their refi rates.  An article in THE HILL stated that 82% of homeowners have a home mortgage under 5%, 62% under 4% and 23% under 3%. This is why homeowners are unwilling to walk away from their low mortgage payment.  Very few Sellers see it to be a good financial decision to leave a high equity property with a very low payment to buy a home at today’s prices with a loan at 7%. The smart sellers are meeting with their financial advisor and finalizing their decision based on their desire to move on.

A slight drop in interest rates could change all of this. Most predictions are for us to see 6.5% mortgage rates by the end of the year. Homeowners that were wanting to move, might just become energetic sellers. This could be you.