Why All the Buzz about Rising Interest Rates?
Opinions are something that we all have but, whether you’re a buyer or seller or both, reviewing YOUR specific numbers is key in helping you make your own home buying/selling decision. Every home (equity) is different as is everyone’s financial situation and level of investment tolerance. So, why all the buzz about rising interest rates?
Interest rates for a 30-year fixed rate mortgage have increased from 3.95% in the first week of January, to 4.66% last week, marking a 7-year high according to Freddie Mac. The current pace of acceleration, fueled by many factors, has buyers wondering how this will impact their home purchasing power. As well, some sellers may even be contemplating staying in their current home, maintaining that lower interest rate mortgage they were able to secure 4 years ago.
As a seller, you are likely be most concerned about ‘short-term price’ – where are home values headed in the course of the next six months? Will your buyer pool be reduced with the increase in interest rates? Maybe. Maybe not. Perhaps you are in a community that regardless of the market, homes sell swiftly, and for top dollar.
Conversely, as a buyer, you must not be concerned about price but, rather, about the ‘long-term cost’ of the home. The Mortgage Bankers Association (MBA), Freddie Mac, and Fannie Mae all project that mortgage interest rates will continue to increase. However, home values are expected appreciate by 5.2% nationally over the next year. I really don’t see interest rates increasing that much over the next year!
Charlotte median sales prices are up 7.1% year-over-year, nearly 2% higher than the national average.
A single digit rise in interest rates should not be stopping you from either buying or selling in this market. Think about the numbers and you’ll see that the ‘fear’ generated about the rising interest rates is not warranted in our market!
So, take the leap into home buying and/or home selling. At the current rate, it’s wise to do so now, rather than wait for home values to rise beyond reach.
© Debe Maxwell | The Maxwell House Group | CharlotteBroker@icloud.com | Why All the Buzz about Rising Interest Rates?