Sell Smart! How Falling Mortgage Rates Are Boosting Home Sellers' Opportunities

Are you contemplating selling your house but have been holding back due to high mortgage rates? The recent dip in rates brings promising news for sellers. Since October, mortgage rates have been on a downward trajectory, falling below 7% for over a month (refer to the graph below):

While they may not reach the historic lows of the 'unicorn' years at 3%, experts anticipate a further decrease in the near future. Dean Baker, Senior Economist at the Center for Economic Research, notes:

“It also appears that mortgage rates are now falling again. They will almost certainly not fall to pandemic lows, although we may soon see rates under 6.0 percent, which would be low by pre-Great Recession standards.”

Here are two compelling reasons why this ongoing trend is excellent news for sellers like you.

1. Reduced Lock-In Effect:

With mortgage rates significantly lower than just a few months ago, you might not feel as constrained by your current mortgage rate. Previously, moving to a new home meant potentially trading in a low rate for one nearing 8%. However, the declining rates have made the difference between your current mortgage rate and the new rate more manageable. According to Lance Lambert, Founder of ResiClub:

“We might be at peak ‘lock-in effect.’ Some move-up or lifestyle sellers might be coming to terms with the fact 3% and 4% mortgage rates aren’t returning anytime soon.”

2. Increased Buyer Pool:

Data from Bright MLS reveals that high mortgage rates have been the primary deterrent for potential buyers (refer to the graph below):

Lower mortgage rates make home loans more economical for buyers, enhancing the appeal and affordability of homeownership. With rates easing, more buyers are likely to re-enter the market, leading to heightened demand for houses like yours.

Bottom Line:

If you've been postponing selling, fearing a higher mortgage rate or anticipating a lack of buyers, the recent decline in rates is a compelling signal to make your move. When you’re ready, reach out to a local real estate agent to navigate this opportune moment in the market.