Timing Your Home Sale: The Mortgage Rate Factor

If you’re considering a move, you might be weighing whether it’s best to wait until mortgage rates drop before putting your home on the market. Here’s some insight that might help you make that decision.

In real estate, there’s a well-known connection between mortgage rates and buyer demand. Typically, when rates rise, buyer interest tends to wane. This happens because some potential buyers hesitate to commit to a higher mortgage rate for their next home, choosing instead to wait for rates to decrease before making a move.

However, when rates start to decline, the dynamic shifts. We transition from a period of subdued or weak demand to one characterized by strong or robust demand. This shift occurs as many buyers who were previously on the sidelines during periods of higher rates re-enter the market to pursue their housing goals. While I can't display a graph due to my constraints, it provides a visual representation of this relationship and our current position.

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.”

But why might waiting not be the best course of action? Well, here’s the key insight: experts anticipate that mortgage rates will still decrease this year, albeit a bit later than initially expected. When rates do decline, more buyers will enter the market, leading to increased competition. If you want to sell before this happens, it might be worth considering making your move now.

If you’re debating whether to wait for rates to drop before selling, consider the impact of buyer demand. Once rates decrease, competition is likely to intensify. If you're ready to sell now, let’s chat.