Sales Have Stalled
With the average national mortgage rate hovering around 7%, the housing market, which was on fire during 2020 and 2021, is finally starting to cool down. Existing homes have fallen for eight straight months, according to data from the National Association of Realtors® — or NAR.
But, for people who make a living selling homes, that just means it’s time to get to work. When sales start to slow, it’s a great opportunity to get creative.
Over the past two years, homes were practically selling themselves. But with mortgage rates at their highest in decades, that’s no longer the case.
When interest rates rise, two common tools used to incentivize buyers are adjustable rate mortgages and buydown incentives. Both of these options give the buyer flexibility when it comes to financing their purchase.
But many realtors are turning to new outlets in order to generate leads. In particular, agents are using TikTok, Instagram (META), and Snapchat (SNAP) to find potential buyers. In a survey conducted by the NAR, 52% of agents claimed that their best leads came from social media. That’s compared to just 28% from MLS sites and 21% from listing aggregators like Zillow (ZG).
If none of those options work, some realtors have even been offering truly unique incentives like free pilates classes or a year’s worth of craft beer.
The past two years have represented a seller’s market, as demand was high and interest rates historically low. People who were selling homes had the negotiating power and bidding wars were common.
Now, with interest rates on the rise, we are likely entering a buyer’s market. This means that buyers will face less competition, since not as many people are buying homes right now.
If you’re in the market, this might be the time to find a favorable price on your new home — or, at least, your next beer.
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