Current Challenges Affecting Home Sellers and Buyers
Home Buyers
Are concerns about refraining from selling your house due to apprehensions about diminished buyer activity stemming from prevailing mortgage rates holding you back? If that's the case, it's essential to recognize the following: recent data indicates a substantial presence of active buyers in the market who are making home purchases. To substantiate this claim, consider the following data.
The ShowingTime Showing Index is a metric for gauging the number of buyers engaging in home tours. The chart below utilizes the most up-to-date statistics and compares them with data from corresponding months in previous years marked by typical market conditions. This comparison effectively illustrates the sustained vigor of today's buyer engagement.
Home Buyer Activity is high according to showing time.
As evident from the juxtaposition of the June 2023 figures with the customary trends in the housing market during this season, it becomes apparent that prospective buyers remain considerably engaged. Their level of activity surpasses the established norms by a significant margin.
If you're considering the possibility of this occurrence, it can be attributed to buyers adjusting to higher mortgage rates and incorporating them as the prevailing norm.
Danielle Hale, Chief Economist, Realtor.com, explains:
“Interest rate hikes continue to further cut into buyers' purchasing power, although they appear to have adapted to the higher mortgage rate environment . . .”
The principle is straightforward. Buyers will consistently have the necessity to make purchases, and those with the financial capacity to relocate under the current rates will inevitably proceed to do just that.
The truth remains that buyer activity continues to be robust. Despite the prevailing mortgage rates, many buyers actively pursue their property endeavors. Given this evident market demand, why postpone your plans when a viable market for your house exists?
Home Sellers Los Angeles
While you might hesitate to list your house for sale because of worries about adopting a mortgage rate higher than your current one, it's essential to expand your viewpoint. Are you anxious about relinquishing a previously locked-in, lower interest rate? Although the financial aspect is undoubtedly important, recognizing the significance of your personal needs is equally essential.
Bankrate says:
“Deciding whether it’s the right time to sell your home is personal. There are numerous important questions to consider, both financial and lifestyle-based, before putting your home on the market.”
Therefore, take a moment to introspect: What underlying reasons initially drove your desire to relocate?
I think your primary impetus probably extended beyond purely financial considerations. The contemplation of selling your property likely stems from alterations in your life circumstances or a change in your housing requirements.
Driving Forces Behind Home Seller Movements
Let's delve into some of the prevailing motivations driving sellers to make their moves in the present day. A recent article published by Builder Online offers valuable insights into this matter. Through their research, they have identified the subsequent categories:
Divorce - When navigating a separation or divorce, continuing to reside under the same roof can prove challenging. In such situations, it's often necessary to sell your existing property to secure your own place.
Marriage - If you've recently tied the knot, you might discover that your current space is insufficient, prompting the need for more room. Alternatively, as a couple, you might aspire to find a new dwelling that you've collectively chosen.
Births - As your family expands, your need for additional square footage, including extra bedrooms, can become paramount. If your living space is becoming cramped due to the growing number of family members, the urgency to relocate might become unavoidable.
Deaths - Coping with the loss of a loved one can make residing in your current home emotionally taxing. Whether due to financial considerations or the excess space no longer being necessary, moving might become a prudent choice
Retirement - Transitioning into retirement, or being in the midst of it, might prompt you to seek downsizing opportunities to curtail expenses. Alternatively, you might aim to relocate closer to family or a dream destination. Given this new life phase, your existing residence may no longer meet your evolving needs.
A survey from Realtor.com finds other sellers are in the same boat. It says 1 in 4 sellers are choosing to move for personal reasons, even with current rates:
“. . . more than half of seller-buyers (56%) who are planning to sell in the next 12 months said they are waiting for rates to come down, while 25% need to sell soon for personal reasons.”
Should the urgency to sell arise due to personal changes, keep prevailing rates from hindering your aspirations. There are avenues to help you get the desired transition. Leveraging the equity amassed in your present property can be a resource to help you make your next purchase.
While there exist compelling motivations prompting home sellers to take action, those without immediate obligations often exhibit hesitancy due to the presence of higher rates and a cautious "wait and see" approach. Inventory levels are even lower than pre-pandemic measures, adding to the complexity. On the buyer's side, the challenge lies in encountering elevated rates and limited inventory. In today's market, both buyers and sellers contend with distinct challenges. If a sale or purchase is necessary, it's advisable to proceed, recognizing that every market has its own advantages and disadvantages. Seizing the opportunity of fewer buyers and reduced competition allows for securing a home now, potentially paving the way for refinancing in the future.