Here are some exciting updates for sellers in the Orange County real estate market and beyond. I’m particularly looking at how homebuyers are adapting to the current mortgage landscape.
And it's good news! People buying homes are getting cozy with the 'new normal' in mortgage rates.
The story behind these mortgage rates is that they’ve been holding pretty steady, between 6% and 7%, over the past nine months.
Have a look at this graph displaying the trend for the 30-year fixed mortgage rate since last October.
Lawrence Yun, the Chief Economist at the National Association of Realtors (NAR), says that these mortgage rates have a big impact on buyer demand and, naturally, on home sales. I don’t think anyone’s surprised to hear that. Yun emphasized the positive vibes of steady rates: "When mortgage rates are steady, we see steady home sales. That's been the case for several months now."
As a seller, isn't that just music to your ears? It should be. Consistent home sales mean people are looking for and buying homes.
When mortgage rates shot up last year, from about 3% to a whopping 7%, a lot of potential buyers experienced sticker shock. Many decided to wait it out. However, over time, that surprise faded.
Buyers have grown comfortable with current mortgage rates and realized that the ultra-low rates of the recent past are in the rearview mirror. I received 17 offers for my latest listing at 27 Morning Dove, and the house sold in just 6 days – we close escrow late this month.
As Doug Duncan, SVP and Chief Economist at Fannie Mae puts it: "Buyers are coming to grips with the fact that higher mortgage rates are here to stay."
A recent survey by Freddie Mac is worth noting here. It shows 18% of people surveyed said they're planning to buy a home in the next six months. That’s nearly one in five people! That's a strong indication of how active buyers plan to be in the coming months.
Of course, we must remember, mortgage rates aren't the only thing driving people to buy homes. Life changes, job relocations, changing family dynamics, personal reasons - people will always have their unique motivations for moving. So if you're in Irvine or anywhere else in the gorgeous County of Orange, you can feel confident knowing there's a solid market for your house today. And that market is alive and kicking as buyers come to terms with the current rates.