The Zillow photo told the story and it wasn’t good: The mansion in the swanky Nashville suburb of Franklin showed a thick blanket of soot and extensive fire damage to its roof. That’s not exactly “move-in ready,” and with mortgage rates soaring, it’s easy to imagine this listing went up in smoke.

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Thankfully, no one was hurt in the fire — and no one was ready for the ending. The humbled abode sold within a week. As they say in Tennessee (and pretty much everywhere), “Wha?”

Location no doubt played a role. Doesn’t it always? Immensely popular among rich music biz types (including stars), Franklin has the requisite cute boutiques and funky eateries, along with abundant green space and even Civil War battlefield history.

It’s also a bellwether of the real estate market’s surprising resilience. When interest rates go up, home sales are supposed to go down; labor shortages, too. In either case, that hasn’t happened. For home buyers (perhaps gainfully employed of recent) and sellers, the key data points reveal causes for optimism.

After six straight months of declines, pending home sales rose in December and then again in January, according to the National Association of Realtors. Though year-over-year numbers declined across the U.S. in 2022, the NAR’s Pending Home Sales Index — which tracks contract signings as a leading indicator — improved for the second month in a row by 8.1%.

“Buyers responded to better affordability from falling mortgage rates in December and January,” said NAR Chief Economist Lawrence Yun.

No debate about mortgage rates

In the housing market, interest rates are king. And queen. And prince and princess. From a financial standpoint, mortgage rates rank as the top variable that impacts a home buyer’s decision.

Compared to just three years ago, those figures have remained high. That has stoked broad concern among analysts that buyers would rather wait out interest rate hikes and re-enter the market; here, the magic number hovers in the 3% range.

But that could make for a long wait. All signs point to further Fed hikes in its bid to tame inflation — and there’s little doubt that Fed chair Jerome Powell is frustrated that he can’t cool the job or housing markets. (Too bad, Jerome: Every job seeking, house hunting/selling American feels the exact opposite way.)

Still, go figure — literally. The average rate on a 30-year fixed rate mortgage has risen recently to 6.65%, according to Freddie Mac data. True, that’s nearly double where it stood in January 2022, but experts are still cautiously optimistic buyer interest will pick up as the spring season rolls on.

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Housing tours de force

House shopping involves more than checking in on Zillow, even if they’ve cornered the market on fire-gutted mansions in the South. Housing tours are up, real estate brokerage firm Redfin announced in late January, as more customers request them and initiate the homebuying process. In some markets such as Seattle, Palm Beach, Fla. and Richmond, Va., bidding wars have returned, the firm said.

In other markets, old school negotiation is making a comeback. Redfin’s report suggested buyers may have adapted to mortgage rates in the 6% range after 7%-plus rates scared them off in October 2022.

Meanwhile, sellers who in 2021 could take advantage of low inventory and comparatively lower rates — the stuff of universal bidding wars — now face buyers who will choose wisely based on the moderating but still elevated rates. As Redfin and others have reported, sellers have been more willing to make concessions.

Some closure on foreclosure

Foreclosure starts reflect another facet of the market’s strength.

Starts were down 34% compared to 2019, according to ATTOM Data’s Year-End 2022 U.S. Foreclosure Market report. Year-over-year starts were up in December 2022 but down between November and December. That suggests government lending rules and an overall strong economy had contained foreclosures.

Data compiled by ATTOM shows more than 90% of borrowers in foreclosure have positive equity, “which they appear to be leveraging in order to avoid a foreclosure by refinancing their mortgage or selling the property at a profit,” the group said. “It seems likely that this is a trend that will continue in 2023.”

So if you’re looking to make a move — buying, selling or maneuvering past foreclosure risk — remember this stock market corollary: market timing. Getting in and out of a stock at an ideal time appears easy to do, but it’s virtually impossible. No one could have foreseen, even a year ago, how much mortgage rates would jump. Will they take off again tomorrow? We know the Fed is eyeing more rate hikes.

The bottom line is that when an opportunity pops up, especially if it means a superior school district and/or a better quality of life, you may want to jump on it. No need to pursue a mansion scarred by fire — just take stock of your finances and your burning desire.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.