Will home buyers jump at cheaper mortgage rates?

Altos Research is the premier resource for real-time real estate data. We provide weekly market statistics, analysis and reporting for 99% of the zip codes in the U.S., helping real estate professionals, investors, financial institutions, and their clients make better-informed decisions.

Featuring Mike Simonsen, President of Altos Research

A true data geek, Mike founded Altos Research in 2006 to bring data and insight on the U.S. housing market to those who need it most. Altos provides national and local real estate data to financial institutions, real estate professionals, and investors across the country, and the company is now part of HW Media, publisher of HousingWire and RealTrends. Mike uses Altos data to identify trends in the real estate market well before the headlines, and his work has been featured in the New York Times, The Atlantic, Fortune, Forbes and other publications.

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[michaelwiebeck]

Mortgage rates are currently at an all time high since 2000(23 years) and based on statistics on inflation, we might see that number skyrocket further, a 30-year fixed rate was only 5% this time last year, so do I just keep waiting for a housing crash before buying or redirect my focus to the equity market

[kortyEdna]

Mortgage rates are currently at an all time high since 2000(23 years) and based on statistics on inflation, we might see that number skyrocket further, a 30-year fixed rate was only 5% this time last year, so do I just keep waiting for a housing crash before buying or redirect my focus to the equity market.

[AdamWrightfool]

At 39 and recently laid off, I’m at a breaking point. With $425K saved for early retirement at 50, $10K in an HSA, and a property that could yield an additional $200K, what are my options for generating steady income?

[cynthiastarks]

If I were a home buyer and didn't need to move right now, I would absolutely wait until next Spring. In my Central Indiana area, many houses are sitting on the market and seeing price reduction after price reduction. Unfortunately, sellers seem to think we're still in the pandemic era and are seeking to continue to price their homes too high. As realtors, we need to emphasize where the market is right now, and encourage more realistic pricing.

[MikeCasey-zm]

In my opinion, housing market crash is imminent due to the high number of individuals who purchased homes above the asking price despite the low interest rates. These buyers find themselves in precarious situations as housing prices decline, leaving them without any equity. If they become unable to afford their homes, foreclosure becomes a likely outcome. Even attempting to sell would not yield any profits. This scenario is expected to impact a significant number of people, particularly in light of the anticipated surge in layoffs and the rapid increase in the cost of living.

[daninthedirt]

We are 1st time home buyers we will wait prices & rates are too high

[SigFigNewton]

Low demand for many months.
Gets interpreted as there being many buyers on the sidelines, lots of demand incoming!

Low new listings for many months.
Gets interpreted as sellers not having to sell, very low supply incoming!

The bullish bias that had Zillow etc predicting double digit home price appreciation from mid 2022 to mid 2023 (the reality was flat yoy prices) is still present. If the bias is off by as much now as it was then, it won’t be only a couple of states experiencing appreciable depreciation.

[Anonymous-slyu]

Mike you kept being so insistent that lower rates would = more home buyers and kept putting off that a reduction in rates was likely to coincide with a slower growth economy. Here we are and your theory is slowly being proven wrong.

Clearly there is a rate where demand will be spurred, but rates don't exist in a vacuum. Other economic factors are always at play.

[ronno]

like we have been saying since the hikes began, there will be no demand until prices go lower.

[edmundj]

No. Only those who are really desperate and ignorant of how ridiculously high the prices are right now will buy into it.

[tonyredemann]

Ive noticed more orice cuts here lately as well. However, its just homes that were listing alot over their actual value then they reduce to or just ckose to the actual value then sell. Its not really home value decreasing. Seen that alot here in northern va and people seeing it happening in many other areas.

[ColinCrawford]

If folks had their down payment in the equity markets - they maybe more concerned about the sell off rather than a small decrease in mortgage rates !

[NoOne-ho]

They'll jump at cheaper home prices

[hollimccraygroup]

If the unemployment rate continues to rise this year, how do you think that impacts listings and prices? It would seem that would be more motivated sellers coming to the market due to job loss.

[nonexistent]

Affordability has a way to go to excite me. 😂

[peterbedford]

Depends on what "cheaper" is

[luissuarez]

NO. In my opinion, is not just about mortgage rates is also pricing. I will be a cash buyer, but i refuse to buy until prices come down.

[ebutuoy]

It'll bring on a refi wave and some buyers. And more buyers as rates decrease.

[SigFigNewton]

These data are far more bearish than his interpretation

[JimmyGCarolinas]

If you are building a new construction home, why would you wait? Rates are coming down and if you have a 6-9 month build timeframe, you can contract now and let your rate float until you get closer to closing time, especially with it looking like rates are going down and will continue to go down. The longer you wait, the more competition there will be for homes, for lots, etc. I left general brokerage at the start of the year and joined the largest private builder in the Carolinas, and if you have the time, building a new home is the way to go!