Last week, mortgage rates hit 5 percent. Shortly after, NPR published an article with the title: “Mortgage rates just hit 5%. Here’s how much more expensive that makes home ownership”.**
RISING MORTGAGE INTEREST RATES
Rising mortgage interest rates affect more than just home buyers. It has a ripple effect across the economy.
Here are a few effects that rising mortgage rates might have:
1. Decreased mortgage applications (fewer people interested in getting a mortgage)
2. Increased buyer fatigue (buyers that haven’t gone under contract for a home, delay the purchase)
3. Fewer offers per property
4. Less aggressive price appreciation (home prices going up less quickly)
5. More homes coming to market as sellers don’t want to miss out
The Wall Street Journal published an article with the headline: “As Mortgage Rates Rise, Home Sellers Fear Time Is Running Out to Cash In”.*
Fear is a powerful motivator.
Home buyers were accustomed to historically low interest rates, with the typical mortgage rate in December 2020 around 2.67 percent. NPR spells it out: “The monthly mortgage payment it takes to buy the typical home in the U.S. is now up by a staggering 55% compared with the start of last year.”**
As the WSJ predicts, homeowners may start to think that the window to sell at the top of the market is shrinking.
TO SELL OR NOT TO SELL
1. What do I gain by waiting?
2. What price do I want? (You may be surprised to learn that with my strategic marketing plan and today’s market, you can still get it)
3. How do I get there?
The “how” is the conversation you have with your Real Estate Agent. We can explain how we can make the sale of your home contingent on you finding your next home — whether it is one city over or across the country.