Current homeowners hoping to sell, who are holding back in the hopes of soon re-entering the housing market with the sort of super-low interest rates seen during the pandemic are likely to be disappointed, according to the National Association of Realtors.

“One can never truly predict the future, but I don’t see mortgage rates returning back to the 3% range in the remainder of my lifetime,” says NAR Chief Economist Lawrence Yun.

These extremely-low interest rates – which hit their nadir of a mere 2.6% during January of 2021 – were a measure implemented by the Federal Reserve to keep the economy from going into a recession, or even crashing outright, due to the Coronavirus Pandemic.

The good news is that the drastic slashing of interest rates, along with other economic policies intended to buoy the economy, succeeded in staving off mass recession. The bad news is that these measures succeeded so well that inflation began to grow out of control, necessitating the hike in interest rates.

Ultimately, the takeaway here is that interest rates of 3% or lower were not the market norm.

Consider the following: a homeowner might sell a home and re-enter the housing market to an interest rate of 3% or lower if another major destabilizing event occurs and the Federal Reserve responds in the same way. Alternatively, market conditions right now are demonstrably favorable for sellers, but probably won’t be for much longer.

While the NAR 2023 Member Profile reports inventory shortage as the single most limiting factor for would-be homebuyers in 2022, as well as nationwide inventory reaching its lowest levels since 1999, the pressure of demand has resulted in significant efforts to build up that inventory.

Here in Huntsville/Madison County, the Huntsville Areas Association of REALTORS’s weekly reporting has shown that inventory has risen week after week, with the week ending in June 24 showing a 22.7% increase in the inventory of available single-family units in the area, as well as a 12.4% increase in townhouse/condo units.

In short, the inventory shortage makes it a seller’s market, but for how long?

As always, the decision of whether or not to buy or sell real estate should always be made after consulting with financial officers and realtors, but if the factor holding a potential seller from listing their property is a hope to see a return to 2021 interest rates? Well, that would be a long-shot gamble, at this point, and the potential loss incurred due to new inventory hitting the market and driving down prices to compete could be more than one would have saved by financing at that rate anyway.

Keep reading the Huntsville Business Journal for more updates on the residential real estate market.