It’s a new day.

Whether you moved during the wild COVID real estate market or didn’t, you certainly heard the stories. (My newsletter from April ’22 still stands and—sidebar—if you aren’t getting my newsletters yet, let’s fix that.)

Last April, interest rates started to tick up. By September of 2022, buyers had pulled back hard and Realtors across the country were having very uncomfortable conversations with sellers about why their house didn’t sell in 24 hours for $50k over list price like they had expected.

Now, here we are, one year later, October 2023, and in the spirit of trying to re-learn middle school math with my son right now (anyone else??), here are a few factors for you:

1. We are sitting at the HIGHEST interest rates we’ve seen in decades. At the time of writing, a 30-year fixed mortgage is at 8.53%.

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2. Most homeowners have a really LOW mortgage interest rate. 82% of homeowners currently enjoy a mortgage interest rate of <5%. 23% of homeowners are locked in <3%.

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3. Most homeowners have an impressive amount of EQUITY in their house. Thanks to record-breaking appreciation in the last 4 years, the average American homeowner has $274k in home equity. My own house has appreciated 80% since 2017. Some of you lucky ducks are sitting on 100+% appreciation…

The cumulative effect of 1+2+3 on today’s reality =

• Mortgage applications have fallen to their lowest number in 28 years (down 30% from 2022). Lenders have had a crazy ride: overflowing with business for a few years thanks to an abundance of refinance requests, and now quiet. If you have any friends who are loan officers, give them a little extra love because this is not their year.
• July sales of existing homes were down 17% from July of 2022; this is the lowest sales pace since July 2010! A lot of homeowners are saying, “I’d like to move, but I’d more like to keep my $1200/month mortgage. Thanks, but I’ll stay put for now.”
• Folks are actively debating moving verses renovating. There are a lot of, “should we put money into moving or should we put money into making this place work?” conversations happening right now.

In short, we’re not in Kansas (read: COVID market) anymore. We are operating in a market with new risks and new rewards, you just have to be clued in to what those are and decide if they are for you or not.

The next few blogs will go deeper into: solutions to the problem of high interest rates, pros & cons of moving now verses later, how to put your equity to work for you, & why we’re about to see an exodus of Realtors.

If you found this helpful, please share with any friends, family, neighbors, or coworkers who are trying to make a good decision about what to do next. Or better yet, tell them to sign up for my bi-weekly newsletter, where I share these articles first.