The past week was rough with inflation reports coming in at record highs, mortgage interest rates cruising through 6 percent, and the stock market tumbling. Narrowing in on mortgage interest rates, these seemingly small changes — from 5.0 to 6 — have a big impact on mortgage payments and the cost of the purchase over the life of the loan.
“Mortgage rates hit 6.3%—the real cost to buy a house has officially spiked over 50% in just 6 months” was the headline of a Fortune article. Gone are the days of the 2.75 percent or even 4.0 percent mortgage rates.
How did we get here? Throughout the pandemic and into 2021, home buyers enjoyed historically low mortgage rates. For those brave enough to go into battle to get an offer accepted, home buyers are locked in a low mortgage rate in a fast paced market.
Since the start of 2022, mortgage rates have been increasing as a part of a larger plan on the Federal Reserve level to try to slow down the rampant inflation. Today, in mid-June, we are seeing a real estate market that is less aggressively competitive than a year ago. Although Sellers are still enjoying multiple offers, each week it seems like the number of active listings for sale is increasing.
That’s right: home sellers are starting to get concerned that they might have missed out on their “golden opportunity” to sell.
We won’t engage in fear mongering or unrealistic positivity, so here is some practical good news that you can take action on.
Every agent lists a home differently. My goal is that, regardless of market conditions, I am presenting your home in its most favorable light: professional photos, video, online and print marketing. I am also guiding you through the local trends so that you are not out of position when it comes to countering offers and getting your terms agreed to. What you can get today for your house may be different in two weeks. Reply to this email or shoot me a text with your address and I will prepare a report on what your home is worth. I do this full-time and I love what I do, so even if you decide not to sell, I want to help.
Reach out to me (your REALTOR) and let’s get you talking with your loan officer if you haven’t already. Each percentage increase in your mortgage rate will affect your purchasing power. The good news is that, because increased mortgage rates have reduced mortgage applications and deterred a lot of home buyers, you have less competition. You are less likely to have to remove all your contingencies and agree to every single seller demand. The negotiations have become a little more tipped in your favor.
Call, text, email, and remember that the real estate market is always changing, but the thing that stays the same is my commitment to serve my clients and help them achieve their real estate goals.