While they may not return to the exceptionally low levels of 3% seen during the 'unicorn' years, experts, including Dean Baker, Senior Economist at the Center for Economic Research, anticipate further declines, possibly reaching below 6.0% in the near future—a figure considered low by pre-Great Recession standards.
Here are two compelling reasons why this current trend, along with expectations of its continuation, is particularly advantageous for you as a potential seller:
Reduced Mortgage Rate Lock-In: With mortgage rates now significantly lower than just a few months ago, you may feel less constrained by your existing mortgage rate. Previously, moving to a new home involved the potential trade-off of a low rate for one nearing 8%. However, with the current drop in rates, the gap between your current mortgage rate and the prospective new rate is less significant, making the prospect of moving more financially feasible. Lance Lambert, Founder of ResiClub, suggests that we may be experiencing the peak of the "lock-in effect," indicating that sellers considering upgrades or lifestyle changes may find the current conditions favorable, considering the unlikelihood of 3% or 4% mortgage rates returning soon.
Increased Buyer Interest: High mortgage rates have been a significant deterrent for potential homebuyers, as indicated by data from Bright MLS (refer to the graph below). With lower mortgage rates, buyers have the potential to save money on home loans, making homeownership more appealing and affordable. As rates continue to ease, more buyers are likely to reenter the market, leading to increased demand for homes like yours.
If concerns about taking on a larger mortgage rate or a perception that buyers were scarce have been holding you back from selling, the recent decline in mortgage rates is a clear signal that it may be an opportune time to make your move. When you're ready, consider connecting with a local real estate agent to navigate the evolving market with confidence.