If you’re contemplating a move, you might be wondering whether it’s best to wait for mortgage rates to decrease before taking action. To help you make an informed decision, let’s delve into the relationship between mortgage rates and buyer demand in the housing market.
Historically, higher mortgage rates have led to lower buyer demand. This is because many prospective movers are reluctant to take on a higher mortgage rate for their next home, leading them to postpone their plans. However, when rates begin to decline, the demand often shifts from weak to strong. This is due to the fact that many buyers who were previously hesitant due to high rates are now ready to make their move. The graph below illustrates this relationship and the current market status:
Lisa Sturtevant, Chief Economist for Bright MLS, provides further insight:
“The higher rates we’re seeing now are likely to result in more potential buyers opting to wait for rates to decrease.”
Why Waiting Might Not Be the Best Option
So, what does this mean for your moving plans? Here’s the key takeaway. Experts predict that mortgage rates will decrease later this year, albeit later than initially expected.
When rates decrease, more people will re-enter the market, leading to increased competition when you decide to purchase your next home. This could potentially make your moving process more stressful, as increased demand often leads to multiple offer scenarios and rapidly rising prices.
However, if you’re prepared and in a position to sell now, it might be beneficial to stay ahead of the competition. This gives you the opportunity to move before the competition intensifies.
The Bottomline
If you’re pondering whether to wait for rates to decrease before making your move, don’t forget to consider the impact of buyer demand. As rates decline, competition will increase. If you’re keen to stay ahead of the curve and sell now, let’s have a conversation.
