This month, we’re going to tell a story using two graphs. Just for fun, we’ll tell this story backwards by starting with the effect and then revealing the cause.
First, the effect:
You can see the usual steady decline in total properties sold into and through January. Then, there is the typical rise, maybe even a little faster than usual, going through March. However, it nosedives in April, which is not common.
So why the big dip going into April, you ask? The chart below will explain.
The above graph shows 30-year fixed mortgage rates. There has been a hard ceiling for buyers when rates exceed 7%. When they do, buyers back away. Rates neared 7% in May and then went over 7%.
Over the last few weeks, you can see that rates have fallen back below 7%, and the trend seems to continue downward. This timing, heading into the summer selling season, sets up for increased transaction volume, more listings coming on the market, and pent-up buyer demand ready to absorb that additional inventory.