A lot of people have reached out recently with a desire to start planning a move in the fall, but are discouraged by the current mortgage interest rates.

But wait—let’s first get some perspective:

• Interest rates reached as high as 18.93% in October 1981
• Rates dipped as low as 2.65% in January 2021
• The average interest rate between 1971-2023 is 7.75%
• At the time I’m writing this, the 30-year-fixed rate is 7.1%

Here’s what I believe to be the most interesting one, though:

• More than 80% of mortgages in Indiana have an interest rate of less than 5%.

Now, how many home owners do you know who would be motivated by the offer to trade in their current 3% interest rate for today’s 7%? Yeah, not many. So, naturally, we have a lot of folks planning to stay put until interest rates start ticking down again.

The problem? No one knows when that will be. So what do I tell my clients?

“What if rates don’t go down?“
Then we will have a long few years of a lot of locked inventory—essentially waiting out sellers until they are forced to move (death, job transfer, health…).

“What if rates do go down?“
Hold onto your hats because we will see another round of price increases (Buyers are able to get approved for more than they could at the beginning of the year = more competition) and more inventory movement than we usually see at that time of year (that “locked inventory” won’t be locked anymore). That would likely be a good time to sell and opt for new construction, but I’d love to chat about that when/if the time comes.

There is a lot of chatter about rates dipping to mid-5s by the end of 2023.

If that happens, fall/winter (a usually quiet season in real estate) will be like a 2nd spring market—and you better believe my clients and I will be ready. Give me a call and let’s get a game plan together: 317-379-7720.