Despite predictions of lower mortgage rates in 2024, that hasn't happened yet.
Mortgage rates topped seven percent once again at the start of May and home buyers and sellers may not see relief any time soon.
But with expectations for a risky home selling season lower again, realtors said you can actually use that to your advantage right now.
Realtor: bite the bullet and buy right now
Realtor Susan Huff of Huff Realty has been selling homes for 30 years, to everyone from downsizing baby boomers, to young couples just getting started.
She knows seven percent mortgage rates have put homes out of reach for many families.
She tells buyers to bite the bullet if they can because competition is much lower right now than it was during the crazy 2021-2022 period.
"If rates ever come down, hopefully in the next year or two, then they can just refinance," she said.
Buyer Carolyn Marsh listened and decided to bid on a condo despite a seven percent mortgage.
"I knew we could refi if necessary," Marsh said. So I wasn't worried about the interest rate.
In a recent survey of potential sellers, more than 80 percent said they recently hit pause when rates started to climb, according to Kendall Bonner of Realtor.com.
"People have been waiting on average up to two years before putting their homes on the market," she said. "And we find the reason they are doing that is because most home sellers are also home buyers.”
Bonner said 2024 could be a good time to sell. Housing inventory is low, and buyers are eager for fresh options.
"It's not too late to sell your home right now because prices continue to be strong," she said.
What buyers and sellers should do
However, she said sellers — like buyers — should adjust their expectations too.
The Realtor.com survey found:
- Only 12 percent of sellers now expect a bidding war.
- Just 15 percent expect to get more than the asking price.
Those numbers are sharply down from two years ago.
For sellers, Bonner said sprucing up curb appeal with fresh paint and pressure washing makes all the difference, and can get you higher offers.
For buyers, Bonner said:
- Get pre-approved for a mortgage.
- Expand your search area
- Ask specifics about what the seller is asking for before writing up an offer so that you are not wasting your time.
Susan Huff said buyers should look at higher rates as their friend since it has slowed down the competition.
She said the bidding wars will return if rates fall to 5 percent.
"When rates do drop, you're going to see an influx of people like we did a couple of years ago," Huff said, "and people are going to try to outbid each other and prices are going to escalate even higher."
So consider taking advantage of this slower market, and that way you don't waste your money.
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