Interest Rates Are Rising, but They're Still Low in the Grand Scheme of Things.
The rising interest rates have given us real estate professionals, buyers, and sellers alike some points to ponder.
"It's important to remember that over the past two years through the pandemic, interest rates have been at all-time lows. But as rates tick up, remember they are still historically low," says Nicky Shargel from team Shant Banosian, one of our trusted lender partners at Guaranteed Rate Mortgage.
Although volatile, we're seeing rates continue to trend up. Experts caution against trying to time the market to get the best rate. It’s more important for homebuyers to focus on their home buying budget and stick with a payment they can afford, rather than waiting in hopes of rates dropping again in the coming weeks.
Here Are the Top 3 Reasons Why We Think the Housing Market is Going to Remain Strong.
1. Millennial demand for housing is up, closely followed by demand from Gen Z.
2. Demand is (still) greater than supply.
3. Unlike 2008 when we saw the last big dip, borrowers are less likely to default on their mortgage.
What Could Possibly Dampen the Market?
1. Inflation started rising last year, as consumer prices began to climb. Economists at Goldman Sachs Group estimate up to a 35% chance that the economy will go into recession, which would impact the housing market.
2. The Ukrainian conflict may affect the economy between rising energy rates and lower consumer confidence.
While rates are trending up, don’t expect that to mean home prices will come down. Home prices are expected to keep rising because of continued demand from buyers and a limited supply of new and existing homes. If you’re waiting around for the market to crash, you could end up buying in the future when both rates and prices are much higher.
If the market does take a dip and you plan to hold your property - either living there yourself or renting it out - property values will go up again, just as they did after the last "bubble" in 2008.