Buyer Activity Is Up Despite Higher Mortgage Rates
If you’re a homeowner thinking about making a move, you may wonder if it’s still a good time to sell your house. Here’s the good news. Even with higher mortgage rates, buyer traffic is actually picking up speed.
Data from the latest ShowingTime Showing Index, which is a measure of buyers actively touring homes, helps paint the picture of how much buyer demand has increased in recent months (see graph below):
As the graph shows, the first two months of 2023 saw a noticeable increase in buyer traffic. That’s likely because the limited number of homes for sale kept shoppers looking for homes even during colder months.
To help tell the story of why the latest report is significant, let’s compare foot traffic this February with each February for the last six years (see graph below). It shows this was one of the best Februarys for buyer activity we’ve seen in recent memory.
In the last six years, we saw the most February buyer traffic in 2021 and 2022 (shown in green above), but those years were highly unusual for the housing market. So, if we compare February 2023 with the more normal, pre-pandemic years, data shows this year still marks a clear rise in buyer activity.
The uptick in buyer traffic is even more noteworthy considering the increase in mortgage rates this February. The Freddie Mac 30-year fixed mortgage rate rose from 6.09% during the week of February 2nd to 6.50% in the week of February 23rd. But even with higher rates, more buyers were looking for a home.
Jeff Tucker, Senior Economist at Zillow, says the increased buyer activity could continue:
“More buyers will keep coming out of the woodwork. We always see a seasonal uptick in home shoppers in March and April . . .”
If you’re looking to sell your house, seeing buyers still active in the market this year should be encouraging. It’s a sign buyers are out there and could be looking for a home just like yours. Working with a real estate professional to list your house now will help you get your home in front of eager buyers today.
Here on Martha's Vineyard we are seeing the same trends. As we've mentioned in previous blog posts the lack of inventory is what is holding pricing on Martha's Vineyard steady. Buyers are still looking for homes and making moves when they find the right property. However, sellers are also steady and holding to their listing prices even if the home isn't selling within a week. This makes sense as the information we have read states that many sellers don't NEED to sell. They likely have low interest rates and if they own here on the Vineyard they may still have vacation rental income coming in. Also, on the seller side there is consistent market data to back up most pricing. We can't say all pricing because there are still over priced homes on the market however, the price range is pretty consistent. Those homes that need a lot of work are being priced accordingly and those that have potential or are in better shape are getting very close to their listing price.
Martha's Vineyard can be a challenging environment for first time home buyers with prices being at $1,000,000 give or take on a starter home. Those looking for vacation rental properties may have to include some updating in their purchase pricing and this can tend to give some buyers pause. It does not mean they won't buy it just means they are more selective and taking their time to purchase.
Bottom Line
Rising foot traffic is a bright spot for this year’s Martha's Vineyard housing market and indicates that buyers are looking to purchase this year, even with higher mortgage rates. If you’re ready to sell your house, let’s connect.
