Interest rates are dropping. If you’re NOT looking to buy or sell a home in the next 12 months…this may still apply to you. So hear us out. 

Interest rates have been hovering near 8% for quite some time now. This has caused a little bit of an upset in the market and is major news as a result. As of yesterday, we’ve been seeing buyers get pre-approved for interest rates around 6.25%! That’s a pretty incredible drop. 

For buyers who are looking to BUY a home in the next 12 months, there are a few considerations. 

1. Lower interest rates are making homes more affordable. 

2. As homes become more affordable, more buyers will want to buy. 

3. Right now, there isn’t a ton of competition when buying a home. It’s easier for a buyer to ask the seller to pay their closing costs and negotiate during inspection. Buyers can even negotiate a price lower than list price.

4. Competition will steadily increase as interest rates become lower. This will make it harder to find a seller willing to make repairs or pay a buyer’s closing costs. This could also lead to multiple offers per home, purchase prices over the list price, and even buyers willing to pay more than appraised value.

5. For all of these reasons, any buyer who’s looking to make a move in the next 12 months should reach out to discuss the best timeline for their own personal situation.

For homeowners who are looking to SELL a home in the next 12 months, there are a few considerations.

1. Buyers aren’t coming out of the woodwork right now to buy homes due to high interest rates.

2. Higher interest rates make homes less affordable for most buyers.

3. As interest rates drop, more buyers will jump into the market to buy homes. You’d think this would be great for sellers! However, most sellers are also buyers. For that reason, as interest rates drop, there will also be more sellers who start to list their homes for sale.=

4. The amount of new homes being listed is lower now than it was this time last year. This means there is overall less competition for the sellers in today’s market.

5. For all these reasons, any seller who’s looking to make a move in the next 12 months should reach out to discuss the best timeline for their own personal situation.

For anyone who ISN’T looking to buy or sell a home in the next 12 months, consider this: Is it possible for your situation to change in the next 12 months? New baby? Wedding? Relocation? Job Promotion? No one can predict the future, but if any of the reasons listed are something you think could happen, it’s not a terrible idea to keep your eyes and ears on the market just to be informed.

This is simply a reminder that we’re not just here for you when you’re ready to buy or sell. We are real estate consultants who can help you strategize during the decision making process. Reach out and let’s chat!