As we enter the Dog Days of Summer, how will the real estate market respond? It is predicted that we will experience a typical seasonal slowdown. However, buyer demand is expected to continue, and sales are projected to stay on course. It remains uncertain whether more sellers will put their homes up for sale, as it depends on various factors, such as mortgage interest rates, but I have a few ideas.

First and foremost, mortgage interest rates will drive people’s selling and buying decisions. If rates come down, more sellers will likely put their homes on the market as they won’t be quite as married to their current rates. This phenomenon has handcuffed would-be sellers for the last year. Check out this information provided by Redfin this week on interest rates people have on their homes:

·         Below 6%: 91.8% of U.S. mortgaged homeowners have a rate below 6%, down from a record high of 92.9% in the second quarter of 2022.  

·         Below 5%: 82.4% have a rate below 5%. That’s down from a peak of 85.7% in the first quarter of 2022. 

·         Below 4%: 62% have a rate below 4%, also down from a record high (65.3%) hit in the first quarter of 2022. 

·         Below 3%: 23.5% have a rate below 3%, near the highest share on record. The highest was 24.6% in the first quarter of 2022.

Currently, a significant number of homeowners have interest rates below 6%, 5%, 4%, and even 3%. However, if rates reach 5%, more sellers may be inclined to sell their homes. It is anticipated that interest rates will stabilize and remain in the mid 6% range through the end of the year.

Another reason why people are not selling their homes is the relatively short period of time they have spent in their properties. Around 63% of homeowners have been in their homes for less than ten years, with the average duration being just over 13 years. Time and interest rates are two significant factors that influence the decision to sell.

Due to the limited supply of homes and high demand, sales prices are expected to remain strong. I believe the lack of supply and persistent buyer demand will likely keep the market favorable for sellers. This can be challenging for buyers, but it presents an opportunity for homeowners to sell.

The pace of sales is expected to remain steady throughout the summer, with weekly sales projected to be around 600. While there has been a slight decrease in sales week over week, it has not been significant. This indicates that the overall market will continue to be good - not exceptional or volatile.

The big picture? Now is definitely a good time to sell if you’ve been considering it. Buyers may face challenges, but the assistance of an experienced agent can help navigate the market, so give me a call. As always, I am always here to help you!