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The Sub 6% Rate Shift

April 22, 2024 | Reading Time: 1.5 Minutes

What happens if interest rates drop below 6%? Will it prompt those on the sidelines to make their move? Will sellers who previously struggled find renewed opportunity? Or will it be buyers who were previously unable to qualify at higher rates? Our prediction leans towards a surge in seller activity, with buyers flocking back into the market.

This influx of buyers, coupled with limited inventory and heightened demand, is likely to bolster prices, despite the fact that we’re currently witnessing historically high percentages of income required to purchase a home. Although this isn’t a typical scenario historically, the unique combination of factors suggests that prices may stabilize in the face of these challenges. If you are a homeowner with a low interest rate in the 2% to 4% range, consider this scenario: if you were to lose your job and relocate, it’s likely you would choose to retain your home and rent it out. After all, your mortgage, starting with a two, is perhaps your most valuable asset.

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