One of the biggest influences on today’s property market is ‘the lock-in effect’. This scenario means that owners who have low-interest mortgages don’t upgrade because their repayments would rise if they took out a new loan.
In the past 18 months, the lock-in effect has restricted supply for buyers and almost stalled the market.
But this situation is beginning to change.
According to a new Redfin report, the number of owners with mortgages below 6% fell from 92.8% in 2022 to 88.5% as of Quarter 3 last year. And as we swing into 2024, more homeowners will come off these super-low deals.
Buyers will see more homes enter the market, giving them greater choice, especially if mortgage costs fall now that inflation is essentially under control.
When rates move towards the low 6% range, the market will begin to open up.
The average rate for a 30-year, fixed-rate loan today is 6.69%, down from 8% last October, according to Redfin.
So, if you’re considering upgrading or downsizing, it’s time to start preparing.
Do the math
Check the equity in your current mortgage and talk to your bank or broker about your spending capacity. This way, you’ll know the types of property and neighborhoods you can afford before seeking a preapproved loan.
Do a declutter
Start cleaning your home in preparation for buyers. With time on your side, you can declutter in your spare moments. The aim is to allow buyers to envision themselves living in the property, not feel like they are visitors to your home.
First impressions
Ensure the outside of the property is pristine. A good first impression is essential to winning over buyers.
Fix it
Annoying maintenance tasks that you’ve been delaying for weeks, months or even years must be fixed now. If you don’t have the time, call in a local contractor.
Fresh look
If your home could be brightened with a fresh coat of paint, that’s probably the best-value investment you can make when preparing your property for sale. Consider both the interior and exterior.