Becky's Best Bungalow Bets for the Week of Jun 25, 2023: Top 5 + The

Hello BBBB Friend,

Excessive heat warnings are in effect today, and there are actually fewer open houses scheduled. I have selected five new listings to review today. Also, click HERE to see price changes, new contracts, and final sales for homes that are Still on My List.

THE HOME INVENTORY CONUNDRUM¹

Prevailing mortgage rates below 6 percent over the past several years have created a "lock-in effect" among homeowners, leading to a scarcity of available homes for sale and intensified competition among buyers.

A recent analysis by Redfin reveals that the vast majority of homeowners in the United States have mortgage rates below 6 percent. Approximately 91.8 percent of homeowners with mortgages are paying less than 6 percent interest, making them reluctant to sell their homes and enter the mortgage market. Eighty-two percent have a rate below 5 percent, 62 percent have a rate below 4 percent, and a lucky 24 percent have a rate below 3 percent!

The current average mortgage rate stands at 6.71 percent, the highest level over two decades, discouraging buyers and sellers. Redfin's Deputy Chief Economist, Taylor Marr, states that the lock-in effect is expected to persist, as mortgage rates are unlikely to drop below 6 percent by the end of the year. Low inventory levels and decreased listings have led to increased competition among homebuyers, preventing severe price drops despite weakened demand.

At what mortgage rate, would homeowners consider listing their homes? Per the Redfin survey, if rates were to drop to 5 percent, 27 percent of homeowners considering listing their homes would feel more motivated to do so. Forty-nine percent would be motivated if rates dropped to 4 percent or below, and 78 percent would strongly consider selling if rates reached 3 percent or below. However, with the Federal Reserve's focus on fighting inflation, such low rates are unlikely. As a result, only those homeowners who have a need to sell, such as those moving out of town, or for job or health reasons, are currently listing their homes for sale.

¹Sources: Refin, Inman News

Have a great week, and,

Let's look at houses or talk about selling yours!

Becky

CLICK HERE FOR THIS WEEKS BEST BUNGALOW BETS