Here’s what buyers and sellers need to know about our shifting market.
What’s going on with our market? I had a different topic planned for this blog post, but things have moved so fast and dramatically that I just had to talk to you about it. There are tons of factors contributing to our market shift, such as the war in Ukraine, gas prices, inflation, and interest rates, so today I want to explain what’s happening and what it means for you.
The main culprit behind our market shift is our rising interest rates. The Federal Reserve has been raising rates to combat high inflation, and buyers’ purchasing power is decreasing as a result.
Don’t panic. We’ve had high interest rates before, and our current rates aren’t even that bad from a historical perspective. If you check out the chart at 1:45 in the video above, you’ll see that the average interest rate over the last 50 years is 7.77%. In fact, when I bought my first home in 1996, rates were over 8%. I’m not saying that higher rates don’t matter—they do. However, rates rising and falling is a natural part of our market. The mortgage industry will get creative to make sure homes are still affordable.
So what does this mean for buyers? If you’ve been sitting out of the market waiting for things to cool down, it might finally be time to jump back in. You probably won’t be competing against as many buyers, and you may even be able to get some concessions from your seller. However, your interest rate and monthly mortgage payments will be higher.
It’s still a good time to buy, but we need to talk about your strategy. If you plan on staying in your new home for a while, it is still a fantastic time to buy. Homes might not appreciate by 10% or 15% per year going forward, but prices will likely still increase. If you buy now, you can begin building equity and increasing your net worth.
As a seller, you need to understand that the game has changed. Just because your home hasn’t sold in three days doesn’t mean there’s something wrong with it. Houses may sit on the market longer than we’re used to, but you can still get a great deal on your property. If you want to sell, I recommend you move sooner rather than later, so reach out to me to learn more about your next steps.
This is a tumultuous time in our housing market. Now more than ever, you need an experienced expert to guide you. Please give me a call or send me an email if you have any questions. I look forward to hearing from you!
