Whether you’re already a homeowner or looking to buy a home, you’ve likely read recent news regarding mortgage rates, housing inventory, and warnings of an upcoming recession. Despite mortgage rates declining a bit so far this year, don’t expect to see 3% anytime soon. It’s important to have a realistic vision for what you can expect this year, especially if home buying or selling is back on your radar with our improved market.
Last year, mortgage rates shot up to over 7%, causing many buyers to put their buying plans on hold. This year, rates are coming down from that spike, settling at around 6%. This is a great opportunity for homebuyers who were priced out last year, and will likely encourage sellers to move forward with listing their homes due to higher demand. This is helping to balance out the market as demand is leveling up with supply.
Both Freddie Mac and Fannie Mae’s latest monthly housing forecast predicts the average 30-year fixed rate to decline from 6.5% in the first quarter to a flat 6% by the end of the year. Mortgage Bankers Association (MBA) predict that long-term rates have already peaked and expect 30-year rates to drop to 5.2% by the end of 2023. This is excellent news for homebuyers who are looking to purchase a home this year.
Throughout the nation, we are seeing an increased buyer demand over the past few weeks which will continue over the next several months. Because of this, we’re also seeing multiple offers kick back in. It’s unlikely that we’ll see the fast-paced bidding wars and fierce competition of recent years, but we can expect more buyers than this past year, which is great news for sellers.
If buying a home is on your list of goals this year, jump in before the market takes off. For sellers, list your home before supply escalates. If you’re waiting to see if rates pull back even more, you may be making a mistake. Keep in mind if you wait to buy until rates are considerably lower, there’s a significantly higher chance you’ll be competing with many other buyers over the same handful of available properties. You are better off paying a bit more in interest for a home in our current lower demand market and refinancing in a couple years after rates come back down.
Working with an experienced local real estate agent is in your best interest whether you’re a buyer or seller. Experienced agents know the market the best and can help you explore options to achieve your real estate goals. Make sure the agent you work with not only has at least a few years of experience in the real estate world, but that they also maintain a high level of annual sales. Real estate agents will be experts in your target neighborhood, help you find the perfect home, help you navigate the transaction and negotiation process, and help you get your home market-ready. You are trusting your realtor to help you with the most important and, likely, most expensive purchase or sale in your life, so you want to choose well.
All in all, this year’s market is trending to be more balanced than last year, which is great news for buyers and sellers. If you were priced out last year as a buyer, consider coming back to the table with an experienced agent, you may be surprised at what you find. As a seller, keep in mind this year is already seeing more buyers, and spring is an excellent time to sell.
Jeff Lesley has been a longstanding top producing agent in the Cape Fear market for the past 12 years, successfully closing just over 1,000 transactions throughout his career. In May 2022, Jeff partnered with a top Century 21 brokerage owner Greg Harrelson and opened Century 21 Vanguard in Wilmington, NC. Century 21 is consistently recognized for having the scale and reputation for leading the real estate industry into the future. In 2022, Jeff alone sold 88 homes, closing a home roughly every 4 days. With this level of experience, he has negotiated numerous scenarios and contracts and knows this market extremely well. Jeff’s mission is to deliver an elite level of quality service to all clients.
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