“If mortgage rates on a new home are what’s holding them up, potential sellers would be wise to remember that they can refinance if rates come down. Though it’s not a strong buyer’s or seller’s market specifically, it could be one that allows current homeowners to play both sides well.”
Will mortgage rates eventually go down?
Mortgage rates emerged as a major roadblock, according to the report. When asked what’s preventing them from purchasing a new home, 26% of respondents cited the current level of mortgage rates.
The roller-coaster nature of the housing market is affecting consumers’ outlooks, she added. “We’ve seen the housing market of the past few years has been a case of extremes,” Renter said. “And I think the recent past is coloring the outlook of current homeowners. I want them to be able to step back and say, hey, it’s not as bad as you think right now.
“As a homeowner who’s thinking of selling, you have twice as much to consider and not matter when you do it, you’re going to face tradeoffs. And I think right now the tradeoffs are perhaps less extreme than if we were in a very strong sellers’ market or a very strong buyers’ market.”
What is the payment on a mortgage?
To be sure, higher rates do make a sizable difference in monthly mortgage payments. The report cites the example of a $287,000 mortgage that would carry principal-and-interest payments of $1,290 if you were paying the average rate in the fourth quarter of 2012 at 3.5%. However, paying 13.03%, the average rate in Q4 1982, would result in a $3,184 payment.