If you have paid attention to the news at all lately, you know that the Fed has raised the interested rates to combat the rise in inflation nationwide. Of course, when interest rates rise, that means the cost of borrowing money rises with it. Few things are more affected by that than mortgage rates.
Because of that, you may be wondering how interest rates are affected the real estate market and if this is a good time to be buying or selling a home. Raleigh Cary Realty wants to answer that for you.
It’s true that rising interest rates leads to a lower demand for homes, and for buyers that means two things. The first thing is that there is less competition for the homes that are available on the market—preventing some bidding wars. The second thing is that lower demand leads to lower prices. The median existing home price has dropped since its record peak in August of this year.
Conversely, for sellers, you know that you the people in the market right now are serious about buying. This is key because we are at the point where Millennials are hitting the market and buying their first homes. So, while interest rates are high, they will look for bargain deals. If you are ready to sell, work with us to price your house right, and the perfect buyer will be there to make an offer.
Some media sites are predicting a housing market crash by the end of this year, but we don’t agree with that. Is there a correction in the market? Absolutely. But, as inflation decreases, rates will begin to come down.
One thing seems to hold true right now and that is if the rates go down then housing demand goes up and so do prices. However the opportunity to actually see the homes and not be in a bidding war with the rates being higher is something you can take advantage of now. No matter the market there typically is good with the bad whether paying higher interest or more for the home with lower rates, so we suggest keep looking until you find the right one because you have to have a place to live.
For more answers on how interest rates are affecting the market, and what are recommendations are, contact us at Raleigh Cary Realty today. We are your local real estate experts.