If you have been watching the Main Line market for increases in inventory or decreases in prices as a prospective buyer, one question might really be on your mind, Will Mortgage Rate Decreases Increase Inventory on The Main Line? The decline in mortgage rates brings more than affordability – it could lead to more housing options. We wanted to discuss these dynamics as they effect your buying decisions.
Mortgage Rate Lock-In Effect:
Where there a few available homes, it has the effect of homeowners chosing to postpone selling their homes when mortgage rates rose. The effect is called the “rate lock-in effect.” This is because a new house might have higher rates diminishes the incentive to sell. Staying put maintains current lower mortgage rates.
Homeowners Ready to Move, Now:
In December 2023, according to Realtor.com, there was an increase new listings compared to the same period in 2022. This is significant because, traditionally, the housing market experiences a slowdown towards the end of the year as sellers often delay their moves until January. For the first time since 2020, there’s an uptick in new listings during this time of the year. This trend may suggests that the rate lock-in effect is easing with lower mortgage rates and homeowners have more confidence in listing homes.
What It Means for Homebuyers:
We are unlikely to see a flood of options, however the rise in new listings could indicate more listings coming this Spring. According to the Joint Center for Housing Studies (JCHS), a reduction in interest rates could help reduce the lock-in effect and boost mobility. With interest rates decreasing, the barrier to moving is reduced.
Homebuyer Opportunity:
If mortgage rates continue to decrease, more sellers may re-enter the market, providing homebuyers with more opportunity to buy in The Main Line. If you’re on the hunt for your next home, now could be the time to reach out to a Main Line expert. Reach out to Kimmy Rolph Real Estate today to see what is coming to the market in your preferred township.
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