If you’ve got a move on your mind, you may wonder whether you should wait to sell until mortgage rates come down before you spring into action. Here’s some information that could help answer that question.
The housing market has a longstanding relationship between mortgage rates and buyer demand. Typically, the higher the rates are, the lower the buyer demand. That’s because some people who want to move will hesitate to take on a higher mortgage rate for their next home. So, they decide to wait it out and put their plans on hold.
But when rates start to come down, things change. It goes from limited or weak demand to good or strong demand. That’s because many buyers who sat on the sidelines when rates were higher will jump back in and make their moves happen. The graph below helps give you a visual of how this relationship works and where we are today:
As Lisa Sturtevant, Chief Economist for Bright MLS, explains:
“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 asking yourself: what does this mean for my move? Here’s the golden nugget. According to experts, mortgage rates are still projected to come down this year, just a bit later than they initially thought.
When rates come down, more people will get back into the market. That means you’ll have much more competition from other buyers when you purchase your next home. Waiting may make your move more stressful because greater demand could lead to an increase in multiple-offer scenarios and faster prices.
But if you’re ready and able to sell now, getting ahead of that may be worth it. You have the chance to move before the competition increases.
Bottom Line
If you’re wondering whether you should wait for rates to come down before you move, remember to factor in buyer demand. Once rates decline, competition will increase even more.
If you want to sell now and get ahead of that, let’s chat with Chicago real estate experts at KM Realty Group LLC.
