Should I Wait for Mortgage Rates To Come Down Before I Move?

Should I Wait for Mortgage Rates To Come Down Before I Move?

If you're considering a move and are wondering whether to wait for mortgage rates to drop before selling your home, here's some information to help you make that decision.

In the housing market, there's a clear connection between mortgage rates and buyer demand. Usually, when rates are higher, buyer demand tends to decrease. This is because many potential movers are reluctant to take on a higher mortgage rate for their next home, so they opt to wait and postpone their plans.

However, when rates begin to decline, the scenario changes. Demand shifts from limited or weak to strong or robust, as many of the buyers who stayed on the sidelines during high rates are eager to re-enter the market and make their moves. The graph below visually illustrates how this relationship works and where we stand 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 wondering how this affects your move, here's the key point: experts predict mortgage rates will decrease this year, though a bit later than initially expected.

When rates do drop, more people will jump back into the market, resulting in greater competition from other buyers when you're purchasing your next home. This could make your move more stressful if you wait, as higher demand may lead to multiple offer situations and rapidly rising prices.

However, if you're ready to sell now, it might be wise to take advantage of the current market conditions before competition intensifies. This way, you can move ahead of the crowd and avoid the stress of a more competitive market.

Bottom Line

If you're contemplating whether to wait for lower rates before you move, keep in mind how it may impact buyer demand. Once rates decrease, competition will increase significantly. To get ahead of this and sell your home before the market heats up, let's talk.