Lower Mortgage Rates Are Bringing Buyers Back to the Market
As mortgage rates rose last year, activity in the housing market slowed down on the Island, as it did across the country. And as a result, homes started seeing fewer offers and stayed on the market longer. That meant many homeowners on Martha's Vineyard decided to press pause on selling.
Now, however, rates are beginning to come down—and buyers are starting to reenter the market. In fact, the latest data from the Mortgage Bankers Association (MBA) shows mortgage applications increased last week by 7% compared to the week before. And here on the Island, local banks like Cape Cod 5 have been publishing rates under 6% for a 30 year fixed loan. The 10 year arms are in the mid-5% range, as of January, 2023. They also have a special Work Force Housing program that currently only requires 10.1% down and no PMI, for a purchase up to $945,000 for anyone looking for a primary residence.
We are already seeing more buyers entering the market and expect this to continue throughout 2023. If you’ve been planning to sell your house but you’re unsure if there will be anyone to buy it, this shift in the market could be your chance. Here’s what experts are saying about buyers returning to the market as we approach spring.
Mike Fratantoni, SVP and Chief Economist, MBA:
“Mortgage rates are now at their lowest level since September 2022, and about a percentage point below the peak mortgage rate last fall. As we enter the beginning of the spring buying season, lower mortgage rates and more homes on the market will help affordability for first-time homebuyers.”
Lawrence Yun, Chief Economist, National Association of Realtors (NAR):
“The upcoming months should see a return of buyers, as mortgage rates appear to have already peaked and have been coming down since mid-November.”
Thomas LaSalvia, Senior Economist, Moody’s Analytics:
"We expect the labor market to remain robust, wages to continue to rise—maybe not at the pace that they did during the pandemic, but that will open up some opportunity for folks to enter homeownership as interest rates stabilize a bit."
Sam Khater, Chief Economist, Freddie Mac:
“Homebuyers are waiting for rates to decrease more significantly, and when they do, a strong job market and a large demographic tailwind of Millennial renters will provide support to the purchase market.”
Bottom Line
If you’ve been thinking about making a move, now’s the time to get your house ready to sell. Let’s connect so we can discuss what you may want to do to prepare your property and determine the best time to put your Martha's Vineyard home on the market.
