Should I Hold Off on Moving Until Mortgage Rates Drop?

If you're considering a move but are unsure about whether to sell now or wait for mortgage rates to drop, here's some information that might help you make a decision.

In the real estate market, mortgage rates significantly impact buyer demand. Generally, higher rates lead to decreased demand as prospective buyers, wary of taking on costly loans, choose to delay their moves. This causes many to postpone selling and buying until conditions improve.

However, when mortgage rates begin to decline, we typically see a shift from weak to strong demand. Many potential buyers who were waiting for more favorable rates re-enter the market, ready to purchase homes. The accompanying graph provides a clear illustration of how mortgage rates and buyer demand are correlated and the current market situation.

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As Lisa Sturtevant, Chief Economist for Bright MLSexplains:

“The higher rates we’re seeing now [are likely] going to lead more prospective buyers to sit out the market and wait for rates to come down.”

Why You Might Not Want To Wait

If you're wondering about the implications of current mortgage trends on your moving plans, here's a crucial insight: experts predict that mortgage rates will decline later this year, though not as soon as initially expected.

As rates decrease, expect a surge of buyers re-entering the market, which could heighten competition for homes. If you delay your move, you may find yourself in a more aggressive buying environment, potentially facing multiple offer situations and faster-rising prices.

However, if you're in a position to sell now, it might be advantageous to do so before this influx of buyers. Selling now could allow you to relocate ahead of the increased competition, possibly making your move smoother and more successful.

Bottom Line

If you're considering waiting for mortgage rates to drop before you move, remember to consider the impact on buyer demand. As rates fall, competition is likely to increase significantly. To stay ahead of this surge and potentially sell now, it's wise to consult with a real estate agent.

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