Conor Dougherty on transferring low-rate mortgages to new home buyers

Because so little is for sale, home prices have remained stable, and even resumed their ascent, despite a huge increase in borrowing costs.  The refrain among real estate agents and economists is that anyone who secured a mortgage rate of 3 percent or lower owns a valuable asset that they are loath to give up. 

But every asset has a price.  And now an emerging cadre of investors and real estate agents are trying to, in effect, sell mortgage rates from several years ago by transferring them to new buyers. 

Redfin, the real estate brokerage, has seen a steep rise in listings like Mr. Kilboy’s that have comments like “beautiful home with assumable loan at 3.25 percent.”  Facebook groups have popped up to find buyers for them, while new companies are pitching services to speed up the transfer. 

“Homeowners with mortgages that are capable of being assumed have something valuable that many home buyers want and would be willing to pay for,” said Daryl Fairweather, chief economist at Redfin.  “For people who bought when home prices were near the peak but mortgage rates were still low, it may be an attractive way to get out of a remorseful purchase.”

~ Conor Dougherty, "The Hot New Thing Is a Loan From 2021," The New York Times, June 11, 2023