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Rates May Be Creeping Higher But That Isn’t Spooking Eager Buyers
It seems only fitting that right around Halloween the housing market is seeing interest rates “creep” up to almost 8%. However, statistics are showing that even with higher home prices and creeping rates, determined buyers aren’t scared at all.
Creeping Interest Rates and Home Prices
According to Freddie Mac, mortgage rates have risen again, reaching 7.63% on average for a 30-year fixed-rate loan for the week ending Oct. 19. With inflation still looming, some economists are predicting we will see 8% rates within the next 6 months.
So, what does this mean for home prices? Many people assume that the higher rates mean home prices should drop to balance out. Why this can be the case, right now it seems home prices are not budging. According to realtor.com, “In September, listing prices clocked in at a national median of $430,000. And for the week ending Oct. 14, that number held steady, no higher or lower than this same week last year. This holding pattern has been the norm lately.”
Don’t feel haunted over these statistics, however, because it seems the home price increase may finally be stalling. Realtor.com also added that the week of Oct. 14 showed the first stall in home prices in seven weeks, indicating a change in the uphill pattern.
Why Eager Buyers Aren’t Scared of the Real Estate Market
Despite the spooky interest rates and home prices, serious buyers are still purchasing homes as fast as possible. In fact, new home sales in particular are seeing a big increase in demand. MarketWatch.com reports that are at the highest level since February 2022.
Those that are buying homes right now either have to move or want to move despite the housing market conditions. Current buyers have many of these things in common:
- They are eager to buy. Some “have” to move, but others have been waiting patiently for a great property and don’t want to miss their opportunity.
- They have a great real estate agent and lender in their corner. Having both of these ensures they will be on the right track to securing their dream property within their means.
- They understand good properties are selling fast, so they are serious about making an offer when the right home comes along.
As a real estate professional, it can be easy to feel the spook of the Fall market, especially with rates creeping up. However, statistics show that buyers are still making offers on most decent properties that hit the market. This means there are clients to advise, and deals to be made. Don’t let the interest rates or home prices scare you or your clients. It helps to look back historically and see the ebb and flow of interest rates in the U.S. market over the years—check it out here.
Remember, the housing market is fluid and it’s our job to help our clients overcome their fears and reach their home buying and selling goals as effectively as possible.
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