According to Mortgage News Daily, mortgage rates hit 7.49% recently which is the highest since December of 2000.

Mortgage applications are also down 30% from last year according to the Mortgage Bankers Association, which means 70% of the same amount of people are applying for mortgages even in the midst of the fastest run up of rates in history…incredible.

Sales are on track to hit the lowest level since 2008 as we are on track to hit 4.3M transactions compared to 4.1 in 2008.

When you hear that, you think “crap”, but the fact is that a whooping 85% of the same amount of buyers who bought last year, are buying this year.

That’s the definition of resilience, and this is the industry you’re in so feel blessed.

Mortgage delinquencies are the lowest since 1979 and not one “expert” can tell us where the inventory needed to create a balanced market will come from not only in the short-term, but even the long-term.

We have an unprecedented amount of pent-up demand coming from the huge spike of the population hitting the average first-time homebuying age and the building amount of the trade-up sellers who are dying to move but can’t trade into a rate double the amount of their current mortgage.

And, if you have been following the market with me, you know that I believe the longer rates stay up, the more demand is brewing and larger the surge will be on the backend when rates eventually are reduced.

What I see coming, and what you can do:

In my opinion, when we see the surge created by the drop of rates combined with the amount of demand high rates is currently building, three things will happen:

  • The trade-up seller will list their current home adding to the inventory problem, but also take a home off the market as they move causing a net-even to active listings.
  • A wave of first-time homebuyers will emerge unlike anything we have seen in decades causing a net-negative for active listings.
  • Therefore, there will be a big increase in both new listings hitting the market and the number of transactions, but the number of active listings will go from bad to worse.

Absolutely, it’s true that interest rates are higher currently, but it’s important to remember that opportunities still exist for homebuyers.  By purchasing now, you can secure a place to call your own and benefit from the potential for future refinancing when rates are more favorable.  Don’t let current rates deter your clients from making a smart investment in their future.

If you’re looking to list, net top dollar and take advantage of this strong sellers market, do not hesitate to contact us today. We can go over your goals, options and how we can help you in this market.

Source: Mortgage News Daily, Redfin.com