Embracing the New Normal: Homebuyers Adjusting to Mortgage Rates

Lisa Mailhot  |  July 18, 2023

Buyers

Embracing the New Normal: Homebuyers Adjusting to Mortgage Rates

 

Before considering selling your house, it's crucial to understand the current state of the housing market. An encouraging trend is emerging as homebuyers adapt and become accustomed to today's mortgage rates, which are now the new normal.

To gain a deeper understanding of recent mortgage rate developments, the following graph illustrates the trend for the 30-year fixed mortgage rate from Freddie Mac since last October. As evident from the graph, mortgage rates have maintained a relatively steady range of approximately 6% to 7% over the past nine months:

According to Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), mortgage rates play a significant role in influencing buyer demand and, consequently, home sales. Yun emphasizes the positive impact of stable rates, stating: 

“Mortgage rates heavily influence the direction of home sales. Relatively steady rates have led to several consecutive months of consistent home sales.”

For sellers, the news that home sales are currently consistent is reassuring. It indicates that buyers are actively in the market, ready to purchase properties. To provide further context on the impact of mortgage rates on demand, consider the following:

When mortgage rates experienced a sharp increase last year, rising from around 3% to 7%, many potential buyers were taken aback and chose to delay their plans to buy a home. However, with the passage of time, the initial shock has subsided. Buyers have become more familiar with current mortgage rates and have accepted that the historically low rates of the past few years are no longer attainable. According to Doug Duncan, the Senior Vice President and Chief Economist at Fannie Mae, he states:

“. . . consumers are adapting to the idea that higher mortgage rates will likely stick around for the foreseeable future.”

In fact, a recent survey conducted by Freddie Mac reveals that 18% of respondents plan to purchase a home within the next six months. This means that nearly one out of every five individuals surveyed intends to buy in the near future, indicating that buyers are actively planning their moves in the coming months.

Naturally, mortgage rates are not the sole factor influencing buyer demand. Regardless of the current economic environment, people will always have reasons to move, whether due to job relocations, changes in households, or personal motivations. As a seller, you can take confidence in the fact that there is a market for your house today, with strong demand as buyers adjust to the current rate landscape.

Bottom Line

The perception of mortgage rates among buyers is evolving as they become accustomed to the new normal. Steady rates contribute to robust buyer demand and consistent home sales. Let's connect and get your house on the market, putting it in front of these motivated buyers.


Recent Blog Posts

Stay up to date on the latest real estate trends.

Sellers

Unlocking Cost-Free Real Estate Marketing Strategies for Maximum Impact

Lisa Mailhot  |  May 17, 2024

Explore five innovative and cost-free real estate marketing strategies that leverage creativity and strategic thinking to enhance your brand's visibility. From network… Read more

Buyers

The Rise of Tiny Homes as a Game-Changer in Modern Housing

Lisa Mailhot  |  May 16, 2024

Tiny homes are gaining popularity as affordable and eco-friendly housing options, but they come with pros and cons. Explore the tiny house movement and whether it's th… Read more

Buyers

Practical Steps to Achieve Financial Prosperity

Lisa Mailhot  |  May 14, 2024

Discover effective strategies to build wealth and achieve financial freedom in our latest blog. Learn about setting financial goals, managing debt, and the importance … Read more

Buyers

Inland Empire Warehouse Market Faces Oversupply, Rents Under Pressure

Lisa Mailhot  |  May 14, 2024

Explore the current challenges and opportunities in the Inland Empire warehouse market, where an oversupply bubble causing downward pressure on rents. Benefit from ind… Read more

Buyers

Q1 2024 Home Price Surge: Analyzing Metro Market Trends 

Lisa Mailhot  |  May 10, 2024

Discover the latest trends in the U.S. housing market with over 90% of metro areas posting price gains in Q1 2024. Learn which regions are seeing the biggest increases… Read more

Buyers

The Power of Diversity: Enhancing Real Estate Growth and Success

Lisa Mailhot  |  May 10, 2024

Discover how diversity can drive innovation, strengthen client relationships, boost team morale, and improve brand reputation in the real estate industry. Embrace the … Read more

Buyers

Unraveling the Top 10 Deal Breakers in Commercial Real Estate

Lisa Mailhot  |  May 9, 2024

Navigating the complex world of commercial real estate can be a minefield, with many possible challenges that can disrupt even the most promising deals. From financing… Read more

Buyers

How MLSs Are Taking the Reins in Enforcing NAR Settlement Changes

Lisa Mailhot  |  May 8, 2024

Discover the pivotal role of Multiple Listing Services (MLSs) in enforcing the latest commission rules set by the National Association of Realtors (NAR). Learn how the… Read more

Buyers

Homeownership Dreams Fading for Renters in Orange County

Lisa Mailhot  |  May 7, 2024

The latest Federal Reserve Bank of New York survey has revealed a stark reality for renters in Orange County and nationwide – the prospect of owning a home is becoming… Read more

Let’s Talk

You’ve got questions and we can’t wait to answer them.