Why rising interest rates are a good thing for our real estate market.
Interest rates, interest rates, interest rates. It’s all we hear about in the news, but we shouldn’t be surprised. Rising interest rates will affect our market, but that is actually a good thing.
If you’ve been following my blog for a while, you’ll know that this is what we wanted to happen. We wanted the market to stabilize and become more balanced for buyers and sellers. Interest rates had to rise for this to happen, and of course, they’ll help lower inflation too.
Right now, Interest rates are above 6%, but keep in mind that the average historical rate on 30-year fixed mortgages is around 8%. Our current rate is still well below the average, but the increase has caused some buyers to drop out of that market. That’s okay! Some of these buyers probably shouldn’t have been in the market. They were stretching too much and liquidating investments to the point where we didn’t think buying was in their best interest.
Another thing that’s happening in our market is that sellers might not be listing their homes, so we still have low inventory. Fewer buyers and fewer homes mean that we’re already starting to see a more balanced market.
I was comparing interest rates to gas the other day. We might fill up our cars one day, notice that the price dropped three days later, and say that we should have waited. Lots of people feel the same about interest rates, but the difference is that you can refinance your mortgage. If you get locked in at a higher rate, they will drop at some point, and you can refinance.
Things are changing in our market, but maybe not as much as you think. Over the weekend, I listed a home for $725,000. It sold on day one for over the asking price and with great terms. Houses are still moving, there is still tons of demand, and sellers are still getting great offers.
If you have any questions about our market or real estate in general, feel free to call or email me. I would love to help.