Mortgage interest rates are around 5.5% for a 30 year fixed-rate loan and there's talk of rates going even lower. I have also heard the prediction of rates dropping into the 4% range soon. My clients have been asking me if that's true. I really don't know what rates will do next. They could go down but they could go up too. I do believe there is a lot of pent up real estate demand in the Nashville area (and possibly other areas). Many buyers are on the fence or want to "time the market".
Whether rates go further is really not the issue. The recent drop in rates has fueled a noticeable burst in activity in the areas where I usually work - Nashville and Franklin, TN. As long as interest rates stay under 6%, buyers will get off the fence and come out of the woodwork. The supply of homes that has built up over the past several months will shrink. As inventory decreases prices will start to go up and sellers will be less negotiable. I see change coming and it's going to hit us like a ton of bricks. This is great for home sellers, real estate agents, home inspectors, title companies and mortgage lenders. Home buyers better jump on this roller coaster before it leaves. We've already seen the low point so it's only up from here!
While the views stated above are based on my observations in the local Nashville TN market, the video below speaks to where the market is heading on a national level. Please watch Dave Jenks and Jay Papasan in "This Month in Real Estate".
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