That might mean including contingencies in your offer, bidding right at the listing price, or even asking the seller to buy down your interest rate.Īccording to Peterson, she’s had buyers do all of those things in recent weeks - and see their offers accepted. Sellers will have to negotiate moreįinally, you might also be able to negotiate more. That’s down from the 18.3% rate we’re seeing currently. And according to CoreLogic, home prices will increase by only about 4.3% in the next year. Redfin says home prices have already declined 5.5% on average from their recent peak in mid-June. Instead, Peterson said, sellers are having to “get off their pedestals a bit and price their properties more appropriately.” “We’re seeing certain success stories now for buyers that, a year ago, would have been laughable.” As Peterson explained, “From the seller’s point of view, they can no longer price their home wherever they want and assume that low interest rates are going to allow buyers to get into a bidding war and jack up the price.” You can also expect more reasonable price points as rates remain high. “And we’re seeing demand for second homes fizzle quite a bit now.” 2. “Higher rates have made investors think twice about picking up multiple properties at once,” Peterson said. This cuts down on homebuying competition and makes things easier for first-time buyers as well. Investment property and second home purchases are also less attractive when rates rise. Active listings of homes for sale were up 4% at the same time.Redfin’s Homebuyer Demand Index was down 14% year-over-year in mid-August.Just 44% of buyers faced a bidding war in July, down from almost 70% earlier this year.
She’s right: According to Redfin, homebuyer competition is at its lowest point since the early pandemic. As Peterson put it, “We have fewer buyers out there competing less frantically to buy homes.” As rates rise, they force some people to the sidelines, making bidding wars - and the higher prices they come with - less common. The biggest perk of higher mortgage rates is that there are fewer buyers to compete with. priced some buyers out of the market,” which often means fewer bidding wars and more reasonable prices for those who are sticking it out. Peterson adds that “these higher interest rates have. “But for the buyers that have updated their preapproval and stayed within their approved price range, they’re running into less competition out there.” “It might seem counterintuitive because it is definitely true that, as interest rates climb higher, your buying power is reduced,” Peterson said in a recent episode of The Mortgage Reports Podcast. Higher mortgage rates can actually be good for buyers
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