If you're wondering when we'll see an influx of homes for sale, the answer may surprise you. It all comes down to interest rates—specifically, hitting the "magic number." Currently, 87% of homeowners have locked in mortgage rates below 6%. While many would like to sell, they’re hesitant to give up their current rate and take on a higher one. For these homeowners, selling feels like a bridge too far, despite their desire to move.
The Good News: Hope Is on the Horizon
Interest rates have already fallen significantly compared to where they were a year ago. Last year’s rates neared 8%, which dramatically reduced the pool of potential sellers. However, there’s increasing optimism that rates will continue to decrease in the coming months, and that’s where opportunity knocks.
The Magic Rate: Between 5% and 5.5%
So, what’s the tipping point? According to research from John Burns Real Estate Consulting (JBREC), the "sweet spot" for unlocking more homes on the market is when mortgage rates fall between 5% and 5.5%.
At that rate:
47% of potential sellers say they’d be motivated to list their homes.
This is a significant jump compared to last year when only 5% of homeowners were even considering selling with rates near 8%.
What This Means for Buyers and Sellers
For buyers, this potential uptick in inventory could mean more choices and potentially less competition in the market. For sellers who’ve been on the fence, a favorable drop in rates could open up new opportunities to move forward with their plans.
Stay Informed
Market conditions are always changing, and understanding when the right time is to act can be tricky. I’m here to keep you informed with the latest trends and insights so you can make the best decision for your real estate goals.
If you're curious about what this could mean for you, whether you’re looking to buy or sell, feel free to reach out. Together, we can navigate the shifting market landscape.
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