This may sound counterintuitive, but many real estate experts are saying that rising mortgage rates may actually be GOOD NEWS for homebuyers.
- Less competition. Right now, potential buyers are still scrambling trying to lock in rates before they go even higher so it may not feel like things are cooling down any time soon. However, further down the road, with the rising interest rates and home prices reflecting last year’s appreciation, many potential homebuyers may be priced out of the market. That’s good news for homebuyers that can still make the cut, especially if they are in the higher end of the market. As interest rates climb, buyers may be forced to shop in a lower price range than they would have when rates were in the under 4% range to afford the monthly payments. That may leave high-end homes with fewer takers while the medium to lower-priced homes will still be hot commodities.
- Slowdown in home appreciation. This prediction seems to be all over the place with Zillow calling for an increase of 17.3% by years’ end, Fannie Mae setting its sights on 11.2% and the National Association of Realtors calling for a 5.7% increase in median home prices. But logic has it that as more buyers are pushed out of the market that will mean less competition for the homes that are for sale resulting in more realistic offers and a cooling down of the frenzy we saw in 2021.
- Cash buyers can profit from the market conditions. Cash buyers are immune to the fluctuation of the mortgage interest rates but that doesn’t mean the rising rates don’t affect them. However, it’s in a good way. They may be able to take advantage of less competition in the higher-end market if the higher rates send buyers settling for less expensive homes.
Trying to decide what current market conditions mean for you as a potential home buyer or seller in Lake Oswego can be difficult with online advice running from “The year 2022 could be a great year to buy a house—if you’re ready. It could also be a horrible time to buy if you’re not,” to “It’s a terrible time (to buy)—but as good a time as any.” The best way to decide is to sit down with an experienced Realtor who knows your local market and can help you assess if the conditions match your financial situation. He or she can also put you in touch with a loan officer who can give you current interest rates, loan options, and down payment requirements so you can make an informed decision based on what you know and not on what you’ve heard.
I’d be happy to be that Realtor for you. With over 30 years as a Lake Oswego Realtor and resident, I am here to help you make sense of current market conditions and decide your best strategy for moving forward. Feel free to contact me at 503.939.9801, email me at firstname.lastname@example.org and/or check out my website.