Mortgage rates have increased, and buyers are hesitant because of this, so why are we seeing hesitant sellers? The same issues affect both buyers and sellers. Pressure from the rising interest rates is just one of the reasons. Let’s look at all of the possible reasons why sellers may be hesitant in the current market.
Why Are Sellers Hesitant?
As a seller, you may not have a lot of buyer options because so many can’t afford the interest rates combined with the current housing prices, even with a cooling market.
On the other hand, if you are thinking about selling you might be considering that you are locked into a lower interest rate with your current mortgage and don’t want to risk looking for your new home with the current rates.
Usually, home sales decrease with a higher interest rate, and sellers are not enticed to sell if the current rates are 1-2% higher than their current locked-in rate. The market slowdown is a great indication of the booming housing market that began during the pandemic.
Homes On The Market
The number of homes on the market is currently higher than it was this time last year. This means that the market is cooling off and the seller’s market is experiencing a decline. Due to this, there has been a drop in new listings because sellers want top dollar for their homes.
Before the rising rates, many sellers were trying to get their homes sold while buyers could still afford to buy. Supply and demand play a huge role in the market and as we see an oncoming shift, sellers are reluctant to list their homes. A seller becomes a buyer unless it’s a property they were renting.
What does this all mean?
A lot of people speculate about a market crash, but this doesn’t seem to be the case. The market is cooling and correcting itself after being extremely hot with skyrocketing prices, Interest rates will reach their peak, and then it is likely we will see foreclosures.
If this happens you will see the market adjust and correct itself again to meet buyer demand. It is a continuous cycle that changes from a seller’s market to a buyer’s market. This isn’t anything new for those who work in real estate.
No matter what the market conditions are, your situation has a lot more to do with whether or not it is the right time to buy or sell. You should work with an experienced and trusted agent who can walk you through your specific real estate needs. For more information on buying or selling contact your local real estate professional.