Mortgage interest rates peaked this past Fall at 7.79% and have been mostly declining since that time, to current levels of 6.74%.

But, 6.74% can still feel high after interest rates were below 5% for 13 years... and below 4% for three years.

As mortgage interest rates potentially continue to decline, perhaps back down to 6%, what will we see happening in the market?

Will the lower mortgage interest rates spur on more home sales activity?

Maybe, but perhaps not as much as you would likely expect.

If / when / as mortgage interest rates move back down towards 6% -- or the low 6%'s or the high 5%'s we are likely to see more would be home buyers interested in buying.  They will be able to afford higher sales prices and/or their monthly mortgage payment will be lower.

But... in order for a home sale to take place... we need both a buyer AND a seller.

Many homeowners (would be sellers) have mortgage interest rates below 4%.  Quite a few have interest rates below 3%. 

Will a homeowner sell, paying off their mortgage that has a 2.75% or 3.5% rate... to then buy another home with a 6% mortgage interest rate?  Somewhere between no and probably not?

Will a homeowner sell, paying off their mortgage that has a 2.75% or 3.5% rate... to then buy another home with a 5.5% mortgage interest rate?  Somewhere between probably not and maybe?