Mortgage Rates Continue To Slide

I know that it depends on many many things but typically at what rate difference does it make sense to refinance?

Our son and his wife bought a home and idk what rate they got but it was a hefty one. Not sure that they plan to stay there for more than 3/4 years but who really knows?

I really don't understand why housing prices have to go up when rates drop. Would seem ideal for prices to remain flat as rates drop to move inventory and interest in purchasing.
Who making these rules?

I imagine there are quite a few non homeowners who were on the cusp in early 2022 who got priced out due to interest rates right as they were preparing to buy. All those people plus people who have been holding off on upgrading etc will have much more appetite for buying in a declining rate environment.


There’s a lot of demand sitting on the sidelines just waiting for rates to drop a little more.

quote:

---

I really don't understand why housing prices have to go up when rates drop. Would seem ideal for prices to remain flat as rates drop to move inventory and interest in purchasing. Who making these rules?

---

Supply demand equation. I’m a builder and if demand picks up any appreciable amount, my cost to build goes up. If it spikes. My prices will spike. If somehow magically interest rates immediately dropped to 5%, my lumber costs would double at least.

quote:

---

There’s a lot of demand sitting on the sidelines just waiting for rates to drop a little more.

---

This + XenScott's response is likely the majority of it.

All the demand which was actualized with lower rates didn't simply go away when rates rose, it just changed to latent demand. Because of the low supply of available housing at decent prices in areas people want to live, some of that latent demand eventually changes to actualized as some buyers determine the price and rates are worthwhile (and likely figure they will just refi once rates drop).

We're a culture that doesn't like our needs/wants being unmet and isn't scared of over-accumulating debt in order to meet those needs/wants. As more and more time passes with rates being so much higher than they have been for a long time, more and more buyers will get used to the idea of such rates as being the new norm and then try to find ways to make home-buying work within that framework (smaller homes, buying in less desirable areas, etc). This will express itself as prices being slow to drop and an inordinate amount of buyers jumping off the sidelines at any small positivity in the market (like rates dropping).

If that amount of buyers is high enough, it can drive prices back up even though the change in rates isn't enough to make the total price lower than before rates dropped.

It's still a seller's market, if they are patient and realistic enough.

Fuel prices should help most material prices.

I haven't tracked it, but they should have leveled and dropped over the past couple of years.

Not sure why Im getting downvotes

This is exactly what was said. Rates will drop and driving prices higher since there is no inventory

1% rate drop brings back like 5mil new buyers for less a 1mil homes available

quote:

---

quote:
US pending home sales stuck at 22-year low despite dip in rates

---

You don't expect a lag from buyers on the sidelines to buyers in contracts?

The very nature of "on the sidelines" indicates that a mortgage company is going to want to redocument income and asset verification. The homebuyer actually has to find the proper home (not just any home. If the inventory hasn't improved, there is a good chance that "the home" isn't available yet).

There’s a lot of people who own homes currently that would like to move, but have put it off because they didn’t want to trade their current 3% mortgage for a 7+% rate. Rates coming down would get some of those people moving. Though in theory that would add to inventory with the home they’re selling, assuming they aren’t planning to keep it as a rental