Could This “Magic Rate” Unlock the Market?
According to a recent analysis by John Burns Research and Consulting (JBREC), there may be a "magic" mortgage rate that could spark renewed activity in the housing market. For 12 consecutive years, mortgage rates remained below 5%, enabling many homeowners to lock in favorable terms. Currently, 86% of mortgage holders have rates under 6%. JBREC's survey suggests that the 5.5% mortgage rate represents the tipping point that could release the “ lock in effect ”. Additional findings:
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72% of buyers would not accept a rate above 5.5%
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22% of buyers would accept a rate higher than 6%
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66% of consumers believe a “normal” rate is below 5.5%
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88% of consumers believe rates will drop below 5.5% within 5 years
Ralph’s Take
While many homeowners are still reluctant to sell due to the current mortgage rates, this hesitation is easing. That explains the gradual rise in listings this year. For the first time, we have data showing when homeowners might be ready to sell and buy in larger numbers. The 5.5% rate is more of a guideline than a strict cutoff, but it helps us predict market trends. If rates dip below 6% as expected, we may see a major market shift in 2025.
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