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EScroogeJr (< 20)

Open houses and rate cuts.

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March 22, 2008 – Comments (2)

The last 6 weeks have been a roller-coaster for mortgage rates in my part of the world. The rates would go down 0.3% one week, then go up 0.2% next week, then go down another 0.3%, and so on. The general direction is down, of course. I've been following the open house activity for these 6 weeks. My conclusion: there definitely exists a correlation between open houses and weekly mortgage trends.  If Bankrate.com says on Tuesday that rates edged up during the last week, you can expect to see an increased number of open houses on Sunday. If Bankrate says the rates edged down, you are likely to see very few open houses being scheduled. In both cases it is the same inventory that the agency is trying to move. Just wondering if anyone else observes a similar correlation in his neighbourhood?

2 Comments – Post Your Own

#1) On March 25, 2008 at 5:35 PM, madcowmonkey (< 20) wrote:

Never even thought of looking at this. Why were you following the open house activity? The only correlation that I could see between the rate dropping in my mind is that somebody would want to visit the open houses to make a spot on call. Seems like the open houses are closed at the wrong time.

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#2) On March 25, 2008 at 7:17 PM, EScroogeJr (< 20) wrote:

When rates are down, the agency feels no urgent desire to sell anything. They call up the clients and say: you know, rates are going down, let's not sell your house at these prices. Let's wait and see if buyers will be willing to offer us an even better price.  Then the next week rates go up, and the agency says: OK, rates are not going down that much, maybe we'll be wiling to put our inventory for sale at today's prices after all.

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