Rising Interest Rates Are Causing a HUGE Shift in the Real Estate World of Supply and Demand By: Michelle Lorenzetti, Investment Broker Rising interest rates are causing a
When rates rise, purchasing power of
HUGE shift in the real estate world of
borrowers shrinks. The average loan
supply and demand. No one has a
amount in September was $305,550 –
crystal ball but all signs appear to be
way lower than the February peak of
pointing towards a recession, even
$340,000.” Many sellers are still not
though reports on gross domestic
comprehending this – and still think they
product looked positive for us last week. can get a number they are wanting – just The 30-year fixed rate mortgage is at
because that is the number they need!
7.08% - 20-year high - since April 2002,
Not the case! Sellers need to
and really contributing to slowing in the
understand the facts of the market, and
housing market. On top of this, there
if they want to take advantage before
are higher costs all over, which means
rates go higher they should do so now.
low consumer confidence. Many buyers It helps we have a huge amount of are “waiting” and the decrease in
closed data on the books with the higher
demand has shrunk buyer pool and real
purchase numbers due to the sellers’
estate prices even further down.
market we’ve enjoyed over the past year
10 / Realtor Report
