The economy is stronger now than in years past.
This is great news for job reports reporting low unemployment, but what does this mean for the housing market? With the economy’s strength comes rising interest rates. This means that it costs new homeowners more than in years past. According to Realtor Magazine, “A monthly mortgage payment on a typical home today is $1,136, up from $639 in 2011.”
While this might make you think that the housing market is bound to slow down, it is hard to guess what will happen. Even though interest rates are increasing, the housing market might not slow down at all. This is because unemployment is low. People have income and want to enter the housing market or make a step-up in their housing situation. In addition to this, new-home construction is increasing, making it easier for current homeowners to upgrade, thus listing their existing homes.
If you’re thinking that housing prices will decrease as the interest rate increases, you’ll be shocked to find that there is no correlation between housing prices and the interest rate. Mortgage rates typically rise when the economy is growing, and the job market is healthy. The price of houses depends on inventory, cost of construction, and the housing market in each specific area.
If you’re thinking about entering the housing market or moving to that next home, rising interest rates shouldn’t deter you, in fact, they should encourage you to make a move now. It is unlikely that we will see sub 4% interest rates in the near future, if ever again.
Contact any of the agents at Robinson and Co. Realty today if you’re interested in buying or selling your home. Our experience and expertise will make this a stress-free process for you.