Lower Mortgage Rates Are Bringing Buyers Back to the Market

February 2, 2023
David Pereira
Buying a Home, First Time Home Buyer, Mortgage News

As mortgage rates rose last year, activity in the housing market slowed down. As a result, home sellers started seeing fewer offers and houses stayed on the market longer. That meant some homeowners decided to press pause on selling.

Now, however, mortgage rates are beginning to come down, and buyers are starting to reenter the market. In fact, the latest data from the Mortgage Bankers Association (MBA) shows mortgage applications increased last week by 7% compared to the week before, thanks to lower mortgage rates.

So, if you’ve been planning to sell your house but you’re unsure if there will be anyone to buy it, this shift in the market could be your chance. And chances are, the equity you’ve gained can help you move up to a home that better suits your needs.

Here’s what experts are saying about buyers returning to the market as we approach spring.

Mike Fratantoni, SVP and Chief Economist, MBA:

“Mortgage rates are now at their lowest level since September 2022, and about a percentage point below the peak mortgage rate last fall. As we enter the beginning of the spring buying season, lower mortgage rates and more homes on the market will help affordability for first-time homebuyers.”

Lawrence Yun, Chief Economist, National Association of Realtors (NAR):

“The upcoming months should see a return of buyers, as mortgage rates appear to have already peaked and have been coming down since mid-November.”

Thomas LaSalvia, Senior Economist, Moody’s Analytics:

“We expect the labor market to remain robust, wages to continue to rise—maybe not at the pace that they did during the pandemic, but that will open up some opportunity for folks to enter homeownership as interest rates stabilize a bit.”

Sam Khater, Chief Economist, Freddie Mac:

“Homebuyers are waiting for rates to decrease more significantly, and when they do, a strong job market and a large demographic tailwind of Millennial renters will provide support to the purchase market.”

Bottom Line

If you’ve been thinking about making a move, now’s the time to get your house ready to sell and get your finances in order. Working with a local realtor to learn the market value of your home is a great start. Then, reach out to us to get pre-approved and learn how your home equity can fuel your next move. Let’s connect today to discuss your options!