Will Rising Rates Negatively Affect Prices?
Four things you need to know about our current real estate market.
Today we're going to talk about whether rising interest rates are going to negatively affect home prices. To answer that question, we need to go over these four points:
1. Lower purchasing power. When mortgage interest rates rise, that will decrease a buyer's purchasing power. Many buyers are now either deciding to leave the market altogether or lower their price point so they can get into a home.
2. Buyers leaving the market are looking to rent. This is a great turn of events for investors who have rental properties.
3. Low inventory. Home prices likely won’t drop because there continues to be a national shortage of homes. Houses that are on the market will likely see their prices stay steady or go up slightly.
4. We are not headed for a crash. Experts have explained that a crash is not on the horizon. In today's market, we have strong mortgage lending rules; this volatility is simply the result of supply and demand.
If you have any questions, reach out to us by phone or email. We look forward to hearing from you.
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