Despite high mortgage rates, it appears mortgage loan applications increased 5 percent for home purchases and 2 percent for home refinancing from the previous week. As our CEO Bess Freedman stated earlier this month, “people still have the need to buy and sell real estate” even with all the uncertainty out there.
We’ve known for some time to expect increased volatility in mortgage rates, and the chances of rates lowering to where they were more than a year ago are very slim. There are buyers and sellers who don’t have the luxury of waiting for the “ideal circumstances”. The recent spike in applications may also be partly attributed to the softening in home prices. Home buyers could very well be willing to accept the higher rates given the reduced price of the property.
All this said, there are still sellers who are not willing to budge in lowering their price in line with the current market. They’re determined to keep their asking price at where it was last year, when the market was on fire, hoping someone will buy it.
For those sellers who have adjusted their pricing to a more realistic number, chances are they will sell quicker and possibly experience a bidding war depending on the asking price and the home itself, of course. Jonathan Miller, CEO and Founder Miller Samuel, says there are still bidding wars in Manhattan, albeit the number is down from 9 to 5 percent, before interest rates spiked; however he says this is still a substantial volume given the current mortgage rates.
If you’re ready to buy, be sure to work with an experienced real estate broker who can negotiate the best deal on your behalf. He/she should be able to tell you if there are other offers on the table competing with you and guide you in winning the bid without overpaying. Here is a short video I recently recorded with tips on negotiating and what to expect from your broker.
Please reach out with any questions. I am happy to jump on a call with no obligation from you to commit to working with me.