What does the increase in mortgage rates mean?

The most prominent topic in real estate right now is the mortgage rate, which was up to 6.7% on a 30-year fixed as of September 29th. The Fed’s rate hike is to cool demand, and in real estate, that means reducing the number of people buying houses. This can be seen, as there has been a drop in the demand for mortgages as rates have risen.

For some people, the goal of owning a home now is their top priority with the option to refinance later when the rate is lower.

For others, it may be to “sit tight” and wait to see what happens next, which seems to be the case for many current homeowners. Many of whom have mortgages below 5% so making a move now could be costlier with the increased rates. This situation is keeping home inventory low. At the same time, it is putting more buying potential in some affluent buyers who can afford to stay active in the for-sale market with less competition and more time to make decisions than in the last couple of years.

With the shortfall of homes available and higher rates, we’re having to adjust from a hyper acceleration, to finding grounding again. If you would like to discuss a possible move, reach out and I can do a free Comprehensive Market Analysis on your home and/or connect you to a trusted lender who can share loan options.

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