Mortgage rates are rising, which means both buyers and sellers need to make their move now.
What do rising mortgage rates mean for buyers and sellers in our market?
When you break it down, rates have gone from just under 4% to 5%, and they should continue to rise into the mid-5% and 6% range over the course of 2019. As you may know, a 1% increase in mortgage rates decreases buyers’ purchasing power by 10%. For example, if a $300,000 house was the maximum you could afford when rates were at 4%, the maximum you can afford now that they’re at 5% is $270,000.
This rise will also start putting downward pressure on prices, so whether you’re a buyer or a seller, the best time to make your move is now. If you’re a seller, you’re better off selling now while buyers can afford more. We’re seeing an exodus of buyers in the $350,000-and-above price range, so this trend along with the rise in rates is not helping home values in that area. Below $350,000 is still a solid seller’s market, but that will start to shift as well.
So don’t wait any longer to make your move. If you have any other questions about our market or you need help buying or selling, don’t hesitate to reach out to me. I’d love to help you.