With Today's Home Prices, Sellers Have a Chance.
As mortgage rates began to rise this year, many homeowners began to worry that their houses' value might plummet. The good news is as follows: Home values have historically increased when mortgage rates rise by a percentage point or more. The most recent data on housing prices appears to support this pattern.
Home price appreciation has been re-accelerating since November, according to CoreLogic statistics. This increase in home price appreciation is seen in green in the graph below:
This is partly due to an ongoing supply and demand imbalance. Housing supply is still limited, while demand is high. As mortgage rates began to rise this year, many homebuyers rushed to complete their transactions before they could rise even higher. Home prices rose even higher as a result of the increased competition. CoreLogic's Deputy Chief Economist, Selma Hepp, explains:
“Home price growth continued to gain speed in early spring, as eager buyers tried to get in front of the mortgage rate surge.”
Experts predict that prices will continue to rise in the future, albeit at a more moderate rate. According to a recent Fortune article:
“. . . the swift move up in mortgage rates . . . doesn’t mean home prices are about to crash. In fact, every major real estate firm with a publicly released forecast model . . . still predicts home prices will climb further this year.”
What Does This Mean to You?
If you're considering selling your home, you should know that now is a wonderful time to advertise it and take advantage of today's home price appreciation. As prices rise, so does the value of your property, giving you a huge gain in equity.
You can put the proceeds from your sale toward the purchase of your future property. And, given today's record-high levels of appreciation, that equity may be sufficient to finance part (if not all) of your down payment.
History shows rising mortgage rates have not had a negative impact on home prices. Now is still a great time to sell your house thanks to ongoing price appreciation. When you’re ready to find out how much equity you have in your current home and what’s happening with home prices in your local area, let’s connect.