How Increasing Rates Affect Your Buyer Pool As a Seller
Why Increasing Mortgage Rates Affect You as a Seller
Selling Your Home Sooner Rather Than Later Might Be in Your Best Interest
With the Federal Reserve raising the short-term benchmark rate, the housing industry is seeing serious changes happening right now, and changes that will happen in the near future. Because the interest rate increase was so large, there will more than likely be multiple rounds of rate increases on the way sometime during the coming months according to Lawrence Yun, Chief Economist at the National Association of Realtors. While interest rates have been slowly increasing throughout the year, this latest increase is the largest increase since 1994.
What Does This Mean for You as a Prospective Homebuyer?
If you're looking to buy a home in the near future, looking at the current rates might have you wondering if now is the right time to buy a home. The answer, like most things in real estate, is that it depends on your financial and life situation/circumstances. For example, a $300,000 mortgage would have cost you $1,265 monthly in December, while it would cost you $1,800 today. These rates are not going anywhere, however, and as mentioned above, they will most likely continue to increase, meaning that if you lock in at today's rates, the increasing rates will begin to work in your favor down the road. If you'd like to learn more about how homeownership can protect you from inflation, you can read our blog about the subject.
What Does the Interest Rate Increase Mean to You as a Homeowner Potentially Looking To Sell?
The most important thing to note about the interest rate increases as someone looking to potentially sell their home, is that selling your home sooner rather than later might be your best move. The market before the increase in interest rates was solidly a seller's market, where multiple offers were being written on houses, and the asking price was the cost of entry to be considered. Today, the buyer pool is shrinking as an increasing amount of homebuyers are simply being priced out of the current market, meaning that the market is shifting towards being more balanced between the number of buyers and sellers. If you are looking to sell your home for the most amount of money, selling now could be your best option. Lawrence Yun, mentioned above, had this to say when speaking about the rate increases and the current market,
"Home sales have recently been trending down toward 2019 figures. Sales could fall even further, with some inventory sitting on the market for more than a month like in pre-pandemic days. Pricing a listed home properly will, therefore, be the key to attracting buyers."
The National Association of Realtors also stated in a recent article that buyers are gaining more leverage, and that Google searches for "homes for sale" were down 10% from the previous year. Combine this with the increase in interest rates, and additional increases potentially happening in the near future, and the buyer pool will see a decrease in numbers that negatively affects your leverage as a seller.
Contact the Ask Cathy Marketing Group To Learn More About Listing Your Home
If you have been thinking about selling your home in the near future, contact a member of our team to start the process today. We are the experts at pricing your home correctly, and can guide you through every aspect of the listing process. The importance of having an experienced team of Realtors is even more important now with the decrease in the number of buyers on the market. Go with the team that has a proven track record of securing the most money possible for their sellers at Ask Cathy. Additionally, if you are curious about what the value of your home is, you can fill out our Google Form located here, and we will contact you with a full evaluation of the price of your home, for free!
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