Triangle Area Real Estate News & Information

Where affordability concerns dominate headlines, potential home sellers, especially baby boomers, find themselves at a crossroads. Conventional wisdom suggests that waiting for mortgage rates to drop or prices to decrease is the prudent approach, but if you are downsizing, you stand to gain more than the conventional buyer who is borrowing. Let's explore some of the ways that baby boomers can win by selling now.

Mortgage Rates

Mortgage rates are hovering between 7-8%, which effectively creates a buyer's market for home buyers, who are not financing. A significant portion of potential buyers have been sidelined, providing a unique opportunity for those willing to navigate the challenges. According to a recent report by NAR, repeat buyers & people who have previously purchased a home & now make up 68% of all purchases. Since 1981, the average for this group was 62%.

Inventory Surge

Where there is reduced competition for homes, given the subset of buyers who are leery of the mortgage rates, we also can see a potential flood of demand when borrowing costs eventually ease. Real estate titan Barbara Corcoran, anticipating a future drop in interest rates, recently remarked in her marketing that "while the days of 2%-3% rates may not return, an eventual decrease to figures with a 'five' in front will trigger a surge in market activity, potentially causing a significant uptick in home prices. " Similarly, the National Association of Realtors' chief economist, Lawrence Yun, suggested a milder boost of 1%-2% increase in inventory once mortgage rates ease. Regardless of these exact figures, sellers who are not in a rush and buyers who are not financing, which comprise many baby boomer demographics, stand to make a profit.

Timing is Everything

Redfin's chief economist, Daryl Fairweather, highlights the importance of timing. Waiting for interest rates to drop might result in a better rate, but predicting this shift is challenging, and the market will likely adjust quickly, leading to a surge in prices that mortgage rates alone won't offset.

In the immediate term, we might see modest drops in home prices due to mortgage rates and buyer demand, however, experts caution that high mortgage rates may become the new norm, with the Federal Reserve signaling a commitment to higher rates to control inflation. Fairweather further suggests that mortgage rates may remain elevated until mid-2024, with a potential easing to around 7% thereafter. Does this sound confusing? Attempting to time the market might lead to disappointment.

My NC Homes offers timeless advice for all ages, & buy when and what you can afford. Baby Boomers are one market segment who stand to gain from buying now, as do other buyers who are not looking for financing or have other means of paying for property. The biggest lesson from these numbers for baby boomers is to consult with a real estate professional who is an expert in your area. Contact My NC Homes for a custom market analysis today.