If you’re looking to sell your current home, you may be watching interest rates with dismay. You were likely hoping for interest rates to stay at all-time lows for a bit longer. It would give you some more time to fix a few things and finally get the property on the market.
But that didn’t happen. Now that rates are over 4%, will buyers leave the market and be less likely to take out a mortgage to buy your home? Will rates continue to rise and further shrink the pool of potential buyers. Let’s take a look at the data and some expert opinions so you can make a financially strong decision.
What’s been happening with mortgage rates:
Based on the Primary Mortgage Market Survey from Freddie Mac, the average 30-year fixed-rate mortgage has increased by 1.2% (3.22% to 4.42%) since January of this year. Here’s a visual to show how mortgage rate movement throughout 2021 was steady compared to the rapid increase in mortgage rates this year:
Just a few months ago, Freddie Mac projected mortgage rates would average 3.6% in 2022. Last month, Fannie Mae forecast mortgage rates would average 3.8% in 2022. As the chart above shows, rates have already surpassed those projections.
Sam Khater, Chief Economist at Freddie Mac, explained in a press release near the end of March: “This week, the 30-year fixed-rate mortgage increased by more than a quarter of a percent as mortgage rates across all loan types continued to move up. Rising inflation, escalating geopolitical uncertainty and the Federal Reserve’s actions are driving rates higher and weakening consumers’ purchasing power.”
Where are mortgage rates going from here?
In a recent article by Bankrate, several industry experts weighed in on where rates might be headed going forward. Here are some of their forecasts:
- Greg McBride, Chief Financial Analyst, Bankrate: “With inflation figures continuing to surprise to the upside, mortgage rates will remain above 4.0% on the 30-year fixed.”
- Nadia Evangelou, Senior Economist and Director of Forecasting, National Association of Realtors (NAR): “While higher short-term interest rates will push up mortgage rates, I expect some of this impact to be mitigated eventually through lower inflation. Thus, I expect the 30-year fixed mortgage rate to continue to rise, although we aren’t likely to see the big jumps that occurred over the past few weeks.”
- Len Kiefer, Deputy Chief Economist, Freddie Mac: “Mortgage rates are likely to continue to move higher throughout the balance of 2022, although the pace of rate increases is likely to moderate.”
In a recent realtor.com article, another expert adds to the conversation:
- Danielle Hale, Chief Economist, realtor.com: “…As markets digest the Fed’s updated economic projections, I anticipate a continued increase in mortgage rates over the next several months…”
What does this mean for you if you’re looking to sell a home?
With both mortgage rates and home values expected to increase throughout the year, it would be better to sell your home and buy a new one sooner rather than later if you’re able. It might be hard to stomach the idea of buying when home prices and rates are both up, but since both will continue to rise it’ll cost you more the longer you wait.
Also, there will be resistance points for potential buyers as mortgage rates rise. If your house is less than perfect, there will be even fewer reasons for buyers to bid on your property.
Bottom line: If you’re looking to sell your home, now is the time.
Work with MarketPro:
There is one way to avoid the interest rate trap.
MarketPro Homebuyers will give you a fast cash offer for your current home just as it is right now. We have the cash to buy your home without securing a mortgage. You can even choose your exact closing date to coordinate perfectly with the purchase of your new home. Our team will walk you through your quote, including a review of what your home would likely bring on the open market. You won’t need to fund any repairs or pay any fees or commissions.
We can even help you with packing and moving expenses!
If you’re in Washington, D.C., Maryland, Virginia, or Pennsylvania, we’d love to show you how easy and stress-free the sales process can be. Contact us today for a no-pressure quote.