Interest Rate Increases
Posted April 25, 2022 in Real Estate Trends
We have been experiencing a seller’s market since 2014.
A balanced market is 6 months of inventory. Inventory includes existing and new homes.
Right now, we have about 2 weeks of inventory.
I believe it will be a long time until we get to a balanced market. Regardless of interest rate hikes.
I have heard over 70% of homeowners who have a loan have an interest rate below 4%. I would guess many of those homeowners will be hunkering down until interest rates come back down. This does not help adding supply to inventory. New construction will not fill the void to help increase supply of homes on the market. Speculative homes built by builders need money to do so. Ever since the last recession, money to over supply housing via new construction has been cut way back.
I have read studies that say the Portland Metro area (including Southwest Washington) will have a double-digit home price appreciation this year. Why? We are in a growing market and have extraordinarily little inventory.
What to do?
If you can, BUY A HOME!!
The appreciation will far outweigh the interest rate increases.
Getting our supply chain back in balance will taper inflation.
Lumber has come down 40% in last 6 weeks. Other costs will follow.
Interest rates will come back down. When that happens people who bought homes in 2022 can refinance.
Our model home is open 12-4 on Saturdays and Sundays. Check our website www.quailhomes.com for its location. If you are thinking about downsizing…. Consider Quail…. you have earned it!!
I hope this helps and thank you for reading the newspaper.