Determining the Ideal Mortgage Rate for Your Move

Considering buying a home? Rising mortgage rates are likely a major concern. They might have even paused your plans.? With rates reaching near 8% in 2023, many potential buyers found the financial burden exceeding their budget. This might be true for you as well.

Bright MLS Data Indicates that the Primary Reason for Buyers Postponing Their Moving Plans is the High Mortgage Rates (Refer to Graph Below)

David Childers, the CEO of Keeping Current Matters, discusses this statistic in a recent episode of the How’s The Market podcast.

"A significant portion, around 75% of potential buyers, have opted out of the market due to high mortgage rates. However, I believe this situation will improve in 2024."

This shift is attributed to the decline in mortgage rates from their peak last October. Despite the daily fluctuations in rates, the outlook for the longer term suggests a continued decrease throughout the year, contingent upon the control of inflation. Experts anticipate that rates could fall below 6% by the end of 2024, a development that would significantly alter the buying landscape. As highlighted in a recent Realtor.com article:

"Purchasing a home remains a strong aspiration for many, yet the prospect hinges on more favorable mortgage rates. Forty percent of Americans aiming to buy a home within the coming year view it as achievable if rates were to fall below 6%."

Predicting mortgage rates with precision is virtually unfeasible, yet the positive outlook from specialists provides a glimpse into the future. If you've put your plans on hold, there's now a glimmer of hope. This suggests it might be the right moment to reconsider your moving plans. The most pertinent question to pose to yourself at this juncture is the following:

At What Mortgage Rate Would I Consider It Time to Make a Move?

The specific percentage that prompts you to resume your house hunting is a personal decision. It could be 6.5%, perhaps 6.25%, or even when rates fall below 6%.

After determining your target rate, the next step is to reach out to a local real estate agent. They will keep you updated on market developments. Once rates reach your desired level, they will promptly inform you.

Bottom Line

If high mortgage rates have caused you to pause your relocation plans, consider the specific rate you'd need to see to feel comfortable rejoining the market.

After identifying that rate, it's wise to engage with a real estate expert who can monitor the situation for you and alert you the moment the market aligns with your criteria.