The article below shares some prospective on rising interest rates: after a few weeks of "panic mode", agents and buyers have settled down and realized that the low, low, low rates we saw last year would not last forever. And rates are still FANTASTIC. Please read to the end; a lot of detailed information is provided for Buyers and Sellers alike.
Agents, Brokers, Home Buyers and Home Sellers All - GET A GRIP!!!
We're reading post after post lamenting the rapid rise of mortgage interest rates. Let's get some perspective.
O.K. 4.75% is not as good as 3.75%. However, it's a LOT BETTER than 6.75%. What are you going to do if rates reach 8.75%?
FACT: If rates were to go to 8.75%, folks would still need housing. As rates go up and the cost of home ownership goes up, so does the cost of rental housing. Parents are still going to want to buy homes that suit their family planning. Community/public schools often mean more to buyers with children than the age/type/style of housing they buy. An example is the 50+ year old communities in close proximity to high ranked public schools and major employment centers.
INTEREST RATES MATTER. However, interest rates determine WHAT consumers buy and not whether or not they buy.
REALITY CHECK: The MID is far more important than the interest rare. For agents who don't know to compute the MID, get a clue. Your buyers will love you. Don't wait for the loan officer to steal your thunder.
Look at the historical averages for some years going back. Guess what??
FOLKS STILL PURCHASED HOMES!
FOLKS STILL OBTAINED MORTGAGE FINANCING!
THE WORLD STILL WENT ROUND AND ROUND!
Some of us sold homes when interest rates were 10-12%. HA! We sold a lot of condos and townhomes in those days. It wasn't really until about 1994 or so when single family detached became the style of home that most buyers wanted to see.
Today, the single family detached is the norm in my market area. Townhomes and condos are a "fall back" choice.
One thing for sure, if rates go much higher, developers will seeking rezoning for more density in new home developments. Builders will be offering more options for town home buyers.
THE MORE THINGS CHANGE, THE MORE THEY STAY THE SAME.
Seems to me that the key to selling real estate is:
KNOWING YOUR MARKET.
KNOWING MORTGAGE PROGRAMS AVAILABLE IN YOUR MARKET.
HAVING RELATIONSHIPS WITH A VARIETY OF LENDERS TO MAXIMIZE YOUR BUYER'S FINANCING OPPORTUNITIES.
We're not going to start turning qualified home buyers away because rates are higher this month than they were a year ago. It doesn't help to blame the home buying consumer for not buying when rates were lower. Home buyers are ready when they're ready, not when the market is ready and surely not when an agent is ready.
Hey! I lament the high cost of red bell peppers every week, but I still buy them.
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