Climbing Mortgage Rates DO NOT Lead to Falling Home Prices

If you’ve been following the general housing market through media unspecialized in Real Estate, you’ve probably been cued to the concerns of rising mortgage rates. Obviously, at first glance, a ghastly outlook fits the bill. But statistics do not support these gut instincts, and an examination of the housing market over the last twenty years shows a different story for sellers and buyers alike.

While a rise in rates means a cut in the demand for homes, there is an associated cut in the supply of homes from the link between the selling and buying decisions. As both supply and demand move collectively in this way, they have counterbalancing effects on price – lower demand decreases price and lower supply increases price.

Freddie Mac, a government-sponsored enterprise specialized in secondary markets for mortgages, also recognizes the general public’s confusion regarding mortgage rates in their 2018 market overview:

“In the current housing market, the driving force behind the increase in prices is a low supply of both new and existing homes combined with historically low rates. As mortgage rates increase, the demand for home purchases will likely remain strong relative to the constrained supply and continue to put upward pressure on home prices.”

Considering the current strength of the market, fused with the history we have on climbing mortgage rates unhampering market success, the aroma of sale is in the air.

And whether you are a move-up buyer or first-timer, the water is warm.

Jump In.

For a free marketing assessment of your home,
Call (877) 549-3702!

 

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