One question I often get from sellers is, “Are low interest rates helping me sell my home?” The easy answer is yes…to a degree. As we move toward the end of the fall home-selling season, the Federal Reserve just completed their quarterly meetings to decide what the benchmark rate should be for borrowing money moving forward.
Their decision to lower the rate ¼ point continues an incredible five years stretch of historically low rates. Lenders and real estate agents continually repeat our mantra that rates are very attractive and they have to go up at some point. Well, that “at some point” hasn’t come quite yet, which takes me back to the original query, “Are low mortgage rates driving home sales?”
In the current marketplace, buyers can acquire 30-year conventional loans for close to 3.75%, allowing them to purchase more expensive homes than they would be able to afford at higher rates. Historically, low rates have motivated buyers to find homes now while money is “cheap”. However, with rates being low for so long, buyers aren’t feeling the threat of higher rates in the near-term. While no one can guarantee future rates, perception is reality, and buyers perceive that the rates will be equally attractive come spring 2020 as they are now. So while rates are low and can provide more buying power for purchasers, it isn’t creating the buying frenzy sellers would like.
If you or someone you know is looking to buy or sell in the coming months, I’d be glad to take a few minutes over a cup of coffee to help you create a game plan so that you too can take advantage of this great opportunity!
