Here’s what is happening with interest rates and how it affects you.
Today I sat down with Chris Kloc from Summit Funding to talk a bit about interest rates. Chris has some great insight on what’s going to happen with interest rates and how that might affect our market.
What do you hear as far as interest rates?
Rates right now are almost the lowest they’ve been for 100 years. They have to go up. The only reason rates have stayed this low is because the Fed has been holding them down. People are experiencing inflation in gas, milk, etc. The Fed announced they would hold rates for all of 2022, but their previous plan was to hold them until the end of 2021. Whichever the case, rates will go up at some point.
“Now is the time to buy or sell.”
If rates go up how does that affect affordability for homebuyers?
It’s a supply and demand issue. People will buy a home based on how much they can afford for the monthly payment. When rates go up, the price increases that we’ve been seeing should level off and then adjust downward so that the monthly payment remains the same.
I heard that rates going up 1% is the same as house prices going up 10%, is that true?
That seems about right as a general rule of thumb. Now is the time to buy or sell. As a seller, if rates go up by 1%, your potential pool of buyers shrinks. As a buyer, even if home values dip in the short term, they always go up over time.
If you have any questions for Chris, give him a call at 423-755-3038 or go to his website. If you’re interested in buying a home or putting your home on the market, give me a call at 423-774-2965. I’d love to help.
