Here’s how rising interest rates will impact our housing market.
Surprise, surprise—interest rates have finally increased. Since January of 2022, the Federal Reserve has discussed raising interest rates. Now that they’ve finally done it, what do higher rates mean for you?
Right now, interest rates are hovering around 5% for those with good credit. If your credit is a little shakier, your rate may even be above 6%. You might think this would have a negative impact on demand, but the opposite has been true so far. Buyers are rushing to purchase homes before rates increase further since they are predicted to rise throughout 2022.
Meanwhile, inventory remains incredibly low, so there’s still tons of competition for homes. Our rates are still low compared to the historical average of 8%, but this increase was still enough to price some buyers out of the market. This is a tough position to be in since rents have increased by 17%.
Rates have not had a huge impact on home prices—at least not yet. Prices are rising steadily, but we won’t see the crazy 18% appreciation we saw in 2021. Most experts predict that homes in our market will appreciate by 10% or 11% by the end of the year. In fact, Fannie Mae predicts prices will increase by another 4% in 2023, so values won’t be going down anytime soon.
If you’re looking to buy or sell, you need to move fast. There’s still plenty of demand for homes, but I’m not sure how long that will last. Call or email me if you have any questions or if you would like to know the value of your home. I’d love to help!