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Mortgage rates affecting housing market decisions

Navigating Today’s Housing Market: The Impact of Mortgage Rates

There’s no denying that mortgage rates are significantly influencing today’s housing market. With this shift, you might be questioning whether it’s still a good idea to sell your house and make a move. Let’s explore three of the most pressing questions you may have, backed by data and expert insights.


Should I Wait To Sell My House?

If you’re considering postponing your sale until mortgage rates drop, you’re not alone. Many homeowners are thinking the same thing. However, it’s essential to understand the potential consequences of waiting.

While mortgage rates are expected to decrease later this year, waiting could mean facing more competition. As more buyers and sellers re-enter the market, the competition can intensify. According to Bright MLS:

“Even a modest drop in rates will bring both more buyers and more sellers into the market.”

This could lead to faster-rising prices and more multiple-offer scenarios when you’re ready to buy your next home. So, delaying might not be as advantageous as it seems.


Are Buyers Still Out There?

Despite some people holding off on their real estate plans, there are still plenty of active buyers. Here’s what the data shows:

The ShowingTime Showing Index measures how often buyers are touring homes. The latest data for March over the past seven years reveals interesting trends:

You’ll notice that demand has decreased from the ‘unicorn’ years (highlighted in pink), driven by higher mortgage rates, rising prices, and limited inventory. However, to truly grasp today’s demand, compare it to the pre-pandemic years (2018-2019), represented by the blue bars.

When focusing on these normal years, you’ll see that buyer activity remains robust compared to those periods. This indicates there’s still a healthy market for selling your house.


Can I Afford To Buy My Next Home?

Concerned about affording your next home with current rates and prices? Consider this: you likely have more equity in your current home than you realize.

Homeowners have accumulated record levels of equity over recent years. This equity can significantly ease the financial burden of purchasing your next home. You might even have enough to buy your next property outright, avoiding a mortgage altogether. Jessica Lautz, Deputy Chief Economist at the National Association of Realtors (NAR), explains:

“. . . those who have earned housing equity through home price appreciation are the current winners in today’s housing market. One-third of recent home buyers did not finance their home purchase last month—the highest share in a decade. For these buyers, interest rates may be less influential in their purchase decisions.”


Bottom Line

If these three questions have been on your mind, it’s understandable. However, having this information should provide some clarity. A recent survey from Realtor.com found that over 85% of potential sellers have been considering selling for over a year. You’re not alone on this fence.

Interestingly, the same survey revealed that 79% of recent sellers wish they’d sold sooner. So, if you’re on the edge, it might be worth taking the plunge and listing your home now.



Should I wait for mortgage rates to drop before selling my house?

While waiting for mortgage rates to drop might seem wise, it could lead to increased competition, potentially resulting in faster-rising prices and more multiple-offer scenarios.


Is there still demand for houses in today’s market?

Yes, there is still significant demand. Comparing current buyer activity to pre-pandemic years shows that the market remains robust.


Can I afford to buy a new home with current mortgage rates and prices?

You likely have more equity in your current home than you realize, which can ease the financial burden of purchasing your next home. Some buyers are even able to purchase without financing.


Why have mortgage rates affected the housing market so much?

Mortgage rates influence affordability, buyer demand, and overall market activity, impacting both buying and selling decisions.


How does my home equity help me in this market?

Home equity can provide a substantial down payment or even allow for an all-cash purchase, reducing the impact of high mortgage rates.


What do recent sellers regret about their timing?

Many recent sellers wish they had sold sooner, as they could have avoided some of the current market’s challenges.

To chat with us about when is the right time to sell your home give us a call at 720-277-9488. Let’s grab some coffee and have a conversation about your goals and how the Dwellings Colorado Real Estate Team can help. 

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