For years, American homebuyers have enjoyed historically low interest rates.
And now that they’ve shot up, many potential home buyers and sellers are sitting still, hoping the rates will return to those historic lows, says Joan Herlong of Joan Herlong & Associates Sotheby’s International Realty.
But they may be in for a long wait, she warns.
“I don’t think rates will ever drop back down to 3% or below,” Herlong says. “I’d love to be wrong, but I just don’t see it happening again.”
In the white-hot Greenville market, waiting on rates to change creates a dearth of inventory.
“So many homeowners refinanced during that 2020, 2021 period when rates were so low,” she says. “As a result, they’re incentivized to stay put.”
Even skyrocketing values — and the enormous growth in equity those skyrocketing values bring — is not enough to move them off-center, Herlong says.
“Therefore, we’re seeing the other side of that two-edged sword — those artificially low interest rates of a few years ago are continuing to drive a very low inventory in this market,” she says.
So, what is a potential homebuyer to do?
Herlong says the first step is to keep it in perspective.
“If you’re preoccupied with interest rates, you might be missing a great opportunity, because there are several options for working with the seller to lower costs,” Herlong says, “such as asking the seller to buy down your rate.”
But even if rates are a little higher than they were two or three years ago, they’re still reasonable, Herlong says.
“Even when interest rates were up to 18%, people still bought and sold houses,” Herlong says. “They didn’t put their lives on hold. They bought and then refinanced when rates dipped.”
