Understanding the Real Estate Market Trend & the New Normal
Before you decide to sell your home, it’s important to be informed about the current real estate market trend. Homebuyers are adapting to today’s mortgage rates, which have become normal. Knowing what to expect can help you make an informed decision when listing your property.
The graph below shows the 30-year fixed mortgage rate from Freddie Mac since last October. Rates have been steadily between 6% and 7%, with no major changes during that time.
According to Lawrence Yun, Chief Economist of the National Association of Realtors (NAR), mortgage rates are a major factor in buyer demand and home sales. Yun points out the beneficial effect that stable rates have on such factors. He suggests that buyers can benefit from locking in lower mortgage rates when interest rates remain steady.
“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, hearing that the housing market is steady is encouraging. Buyers are out there and actively purchasing homes. Mortgage rates have impacted this demand recently, so here are some more details.
When mortgage rates skyrocketed last year, many would-be buyers were taken aback and chose to delay their purchase of a home. While this initial shock has subsided over time, buyers have now come to terms with the fact that the unprecedentedly low rates of recent years are no longer available. Doug Duncan, SVP and Chief Economist at Fannie Mae has commented on the matter:
“. . . consumers are adapting to the idea that higher mortgage rates will likely stick around for the foreseeable future.”
A recent survey by Freddie Mac reveals 18% of respondents say they’re likely to buy a home in the next six months. That means nearly one out of every five people surveyed plan to buy shortly. And that goes to show buyers are planning to be active in the months ahead.
What Does This Mean For You?
As a seller, you can rest assured that there is still a large market for your home regardless of what mortgage rates are doing. Buyers are entering the market in droves; motivated by job relocation, growing households, and various other personal reasons. With rates at their current level, buyers have plenty of incentive to make offers on homes right now. So don’t be worried; there is still a great deal of demand for your home.
Bottom Line
Overall, the current housing market is still strong and homebuyers are adapting to the new normal. Mortgage rates have been relatively steady for the past nine months and buyers are beginning to accept that record-low interest rates of the last few years may be gone for good. With 18% of survey respondents stating they’re likely to purchase a home within the next six months, it’s clear that buyer demand is still active and strong. As a seller, you can feel confident there is a market for your house today. With our experience by your side, you can get your home on the market and in front of those buyers.