Depressed real estate agents should hang in there!
The reason is 2024 will likely be the best year they ever had, according to the WSJ… sort of.
In this recent WSJ article titled, The Home Buyer’s Quandary: Nobody’s Selling! – The WSJ illuminated the reason why inventory is so extremely tight right now.
That reason, as readers know, is “mortgage rate lockdowns,” where sellers don’t want to sell their homes if it means giving up their low-rate mortgages and having to buy in the current much higher-rate environment.
Per the article, “These “golden handcuffs” are keeping the supply of homes for sale unusually low and making the market more competitive and pricey than some forecasters expected.
The reluctance of homeowners to sell differentiates the current housing market from past downturns and could keep home prices from falling significantly on a national basis, economists say.”
2/3 of all mortgages are under 4%, comprising an enormous pool of potential sellers who are “locked in” by their low rates.
This is info I have shared before on numerous occasions, and it is a main reason why the housing market is holding up so well (something else the article addresses).
But – the article also illuminates another factor that few people are considering when the “mortgage rate lockdowns” come to an end (and they will, which I will explain below).
Many of those locked-down sellers want to buy a different or larger home, so once they do decide to sell, they will all become buyers too.
So, the question is, what will break the mortgage rate lockdown mentality? And the answer is obvious: lower rates.
One or two of them could be wrong, but I sincerely doubt that all of them are.
So, this is why 2024 will be an epic year for real estate agents:
- Rates will be much lower, bringing many more buyers back to the market for affordability reasons;
- Lower rates will unlock “locked-down” sellers, bringing much more inventory to market; and
- Locked-down sellers will become buyers – and add that many more buyers to the market.
If I were a real estate agent, I would probably pre-order my Lamborghini now. 😊
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