Should I Move Now or Wait for Mortgage Rates to Drop?

If you’ve got a move on your mind, you may be wondering 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 for you.

In the housing market, mortgage rates and buyer demand have a long history of correlation. Typically, higher rates result in lower buyer demand. That is because some people who want to relocate will be hesitant to take on a higher mortgage rate for their new 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 a large portion of the buyers who sat on the sidelines when rates were higher are going to 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:

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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 originally thought. 

More people will return to the market as interest rates fall. And that means you’ll have a lot more competition from other buyers when you go to purchase your next home. That may make your move more stressful if you wait, because greater demand could lead to an increase in multiple offer scenarios and prices rising faster.

It might be worthwhile to get ahead of that, though, if you are prepared and able to sell right now. You have time to relocate before the level of competition rises.

Bottom Line

If you are debating whether to wait for interest rates to fall before making a move, keep buyer demand in mind. Once rates fall, competition will increase even more. If you want to get ahead of that and sell now, let’s chat.

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