The run-up in rates means for the majority of those borrowers, it makes little sense to move, swapping their existing rate for a much higher one – but which current homeowners are still amenable to leaving their present low-rate environment?
Paul Carson (pictured top), co-founder and mortgage consultant at Philadelphia Mortgage Brokers, told Mortgage Professional America that move-up homebuyers were still active in his market, with some simply biding their time and getting ready to qualify for a new mortgage instead of being motivated purely by interest rates.
Urgency may not be as much of an issue for those buyer types, particularly if they aspire to move home but are still comfortable with their current living arrangements.
That’s a sharp contrast to aspiring first-time buyers. “On the other side of the coin, if you’ve got first-time homebuyers who have a strict deadline and put in a bunch of offers and none of them stick, some are forced to then rent again for another year, which they don’t want to do,” Carson said. “But they need somewhere to live and they don’t have the flexible living situation.”
The US housing market is showing signs of a gradual transition from a seller’s market to a buyer’s market, with existing home sales continuing to fall in June, according to the National Association of Realtors (NAR).
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— Mortgage Professional America Magazine (@MPAMagazineUS) July 25, 2024
How should brokers advise homeowners who may be ready to buy?
While the interest rate outlook may not be as important to some buyers as others, Carson said getting into granular details with clients weighing up a move from their current home has been especially important in the present market. “We want to logically prepare people: ‘here’s what we can do now,’” he said.
