Did you know that every 1% increase in interest rates reduces the number of potential buyers for your home by half? It’s true – the higher the rate, the less buyers […]
Did you know that every 1% increase in interest rates reduces the number of potential buyers for your home by half?
It’s true – the higher the rate, the less buyers are able to borrow. So fewer people will qualify for the loan amount they need. Ultimately, this means that home prices will have to drop (which means less money in your pocket at the closing table!) So far, we haven’t seen it impact home prices in the area, so that’s good news.
Interest rates have already increased twice in the past 3 months – with at least two more rate hikes expected in 2017.
“When you combine higher mortgage rates with increasing home values, mortgage affordability starts to suffer, and buyers will have to spend more and more on their monthly payments,” Zillow Chief Economist Svenja Gudell noted in a recent press release.
There’s good news, though – the latest rate hike didn’t have much of an impact on mortgage interest rates. We’re still seeing rates between 3.5%-4.5% – which means a $300,000 mortgage loan is going to cost around $1,500/month.
If you’ve been thinking about selling, you’ve lost some potential buyers – but it may not be wise to wait until the next increase.
As a matter of fact, home buying has increased recently as a result of the increases. Why? Because people who have been on the fence and haven’t moved forward on buying a home are acting now before the rates go up again. They’ve seen really low interest rates for the past several years and now they realize it’s time to act if they don’t want to miss the low interest rate opportunity.
If you’re planning to buy a new home when you sell the one you currently have, that’s another reason now is the time to act.
Complete the form below and I’ll prepare a Market Study letting you know how much your home could sell for in today’s market. You might be surprised how much the market has improved in the last couple of years.
As a bonus – when we meet to discuss selling your home, you’ll receive a couple of “thank you” gifts just for meeting with me: