Why All the Buzz about Rising Interest Rates?

By
Real Estate Agent with www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 228209
https://activerain.com/droplet/5csg

Why All the Buzz about Rising Interest Rates?

 

Opinions are something that we all have but, whether you’re a buyer or seller or both, reviewing YOUR specific numbers is key in helping you make your own home buying/selling decision. Every home (equity) is different as is everyone’s financial situation and level of investment tolerance. So, why all the buzz about rising interest rates?

 

Interest rates for a 30-year fixed rate mortgage have increased from 3.95% in the first week of January, to 4.66% last week, marking a 7-year high according to Freddie Mac. The current pace of acceleration, fueled by many factors, has buyers wondering how this will impact their home purchasing power. As well, some sellers may even be contemplating staying in their current home, maintaining that lower interest rate mortgage they were able to secure 4 years ago. 

 


 

Is it time?As a seller, you are likely be most concerned about ‘short-term price’ – where are home values headed in the course of the next six months? Will your buyer pool be reduced with the increase in interest rates? Maybe. Maybe not. Perhaps you are in a community that regardless of the market, homes sell swiftly, and for top dollar. 

 

Conversely, as a buyer, you must not be concerned about price but, rather, about the ‘long-term cost’ of the home. The Mortgage Bankers Association (MBA), Freddie Mac, and Fannie Mae all project that mortgage interest rates will continue to increase. However, home values are expected appreciate by 5.2% nationally over the next year. I really don’t see interest rates increasing that much over the next year! 

Charlotte median sales prices are up 7.1% year-over-year, nearly 2% higher than the national average.

 

A single digit rise in interest rates should not be stopping you from either buying or selling in this market. Think about the numbers and you’ll see that the ‘fear’ generated about the rising interest rates is not warranted in our market!

 

Read why rising interest rates are the least of your worries here.

 

So, take the leap into home buying and/or home selling. At the current rate, it’s wise to do so now, rather than wait for home values to rise beyond reach.

 

© Debe Maxwell | The Maxwell House Group | CharlotteBroker@icloud.com | Why All the Buzz about Rising Interest Rates?

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Rainer
23,443
Jonathan Bowen
Hub Edge Realty - Stoughton, MA
Advice. Education. Guidance.

This is all about economics... A 1% rise in interest rates will be devistating to a lot of buyers when we're talking about absolute numbers. People could buy houses for $30,000 when interest rates were at 18% and now that same house is worth $300,000. I, for one, welcome higher interest rates because this real estate market is too hot in Greater Boston.

May 29, 2018 06:26 AM #33
Rainmaker
1,198,510
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

You speak of many of the issues that those buying and selling must consider prior to entering the market, Debe Maxwell, CRS.  A personal financial assessment conducted by an experienced loan officer is always wise ...  but especially so in some real estate markets and for those in more precarious or challenged financial positions.  I always say it never hurts to ask the questions and do the math.  What you stand to gain is enormous, no matter the final decision ...

Great post, as always, Sis!

Gene  

May 29, 2018 11:03 AM #35
Rainmaker
480,632
Mary Hutchison, SRES, ABR
Better Homes and Gardens Real Estate-Kansas City Homes - Kansas City, MO
Experienced Agent in Kansas City Metro area

I haven't heard any pushback re: higher rates from buyers--they just seem to understand they have no control over that except good credit score, higher DP. More complaining about the lack of inventory and bidding wars.

May 29, 2018 01:17 PM #36
Rainmaker
609,401
John Juarez
The Medford Real Estate Team - Fremont, CA
ePRO, SRES, GRI, PMN

Purchasing will be more expensive due to an increase in the cost of financing even if prices remain unchanged…which is not happening. Yet, prices will continue up before that will be any market adjustment. Buyers who say that they do not like the current marked and choose to wait for an adjustment will simply pay more if they finally do buy.

May 29, 2018 05:04 PM #37
Rainmaker
2,155,239
Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents
Lyon Real Estate - Sacramento, CA
Put 40 years of experience to work for you

Every 1/2 % hike lowers purchasing power by $25,000 in a market where the median is less than $400K, but it's not insurmountable. People act like the sky is falling. Hey, you chicken little guys, you would never have survived the 1980s when rates were 18%.

May 29, 2018 07:03 PM #38
Rainmaker
957,152
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Great post! It does make people react when interest rates change!  And for lower prices, an interest rate change can diminish their buying power.  It all depends!

May 29, 2018 09:29 PM #39
Ambassador
3,002,521
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

I agree, John Wiley! I find that buyers focus more on interest rates than they should. Of course, it's a large part of the equation but, it's not the total decision-making factor!

May 30, 2018 01:52 PM #40
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Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

Well, thank you, Thom Abbott! I hope you're well - we need to catch up!

Happy Wednesday!

May 30, 2018 01:53 PM #41
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Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

You are so right, Ron Aguilar! When you are able to explain the data to the consumer, they don't hesitate to put their trust in you, do they?

May 30, 2018 01:54 PM #42
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Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

Agreed! We definitely need a rise in rates to bring balance - it's time for a correction in my mind, Jonathan Bowen

May 30, 2018 01:55 PM #43
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Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

Hi Brotha Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi! You're so right - speaking with the professionals is the ONLY first move when you're thinking of buying a home...always!

Happy Wednesday!

May 30, 2018 01:56 PM #44
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Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

Hi Mary Hutchison, SRES, ABR! I believe we are in very similar markets! The only complaining I'm getting is about the thinventory as well! 

May 30, 2018 01:57 PM #45
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Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

You're exactly right, John Juarez! Both in interest rates and purchase prices - the time is NOW, for sure!

May 30, 2018 03:23 PM #46
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Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

I could not agree more, Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents! Funny but, I call it the same disease - Chicken Little Syndrome!

May 30, 2018 03:24 PM #47
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Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

Sales prices go up all of the time and that never has an impact on our buyers here, Jan Green! But, boy, let those interest rates rise 1/8 of a point and, as Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents said, "OH NO, the sky is falling!" 

May 30, 2018 03:25 PM #48
Rainer
246,855
Chris Lima
Atlantic Shores Realty Expertise - Port St Lucie, FL
Local or Global-Allow me to open doors for you.

Great post, Debe.  This is great information and it is important for both buyers and sellers to be aware of the possible impact, or lack there of.  These rates are still amazing in comparison to other decades and if helps the fence sitters to make a move, I am all for it.

May 30, 2018 03:32 PM #49
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Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

Absolutely! I can't imagine how buyers now would react to 18% mortgage loans, can you, Chris Lima?!!

Have a wonderful evening!

May 30, 2018 03:46 PM #50
Rainmaker
292,224
Mott Marvin Kornicki
Waterway Realty, Realtors® • Broker • South East Florida • - Miami Beach, FL
Waterway Realtors, Notary Public 786-229-7999

Here is South East Florida we see values rise and fall frequently. I'm not sure if its related to over-development of the cyclical nature of South East Florida - we are very transient and seasonal. Many buyers are not seeking any financing at all. Debe Maxwell, CRS 

May 31, 2018 11:32 AM #51
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Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

You know, Mott Kornicki, you are the first person to bring that up and I've actually had more cash deals this year than ever before. For me, it is a bit surprising but, buyers are cashing out to win bidding wars and have no debt. 

May 31, 2018 04:51 PM #52
Rainmaker
50,915
Ricardo Mello
Manhattan Miami Real Estate - Manhattan, NY
Manhattan & Miami Real Estate Agent

Great post Debe 

Jun 16, 2018 01:31 PM #53
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