Interest Rates Continue to Rise How High Will They Go?
Posted September 27, 2022 in Real Estate Trends
Just days ago, the Fed raised interest rates another .75%. This is on top of four earlier rates hikes in 2022—the highest number of increases in one year since the 1980s. They said they wanted to cool down the economy to combat inflation. Guess what? The cooling down part is definitely working, but inflation continues.
The 813 new listings in August on the Regional Multiple Listing Service (RMLS) were down 16.9 percent from July. The problem is that these new listings, together with existing listings, leave less than a two-month supply of homes to sell. It would take only 1.8 months for all homes on the market to sell if no new homes were added to the supply. Low supply means higher prices, even while it costs more to borrow due to the interest rate hikes.
Sales decreased only slightly last month— not enough to even out supply and demand, but enough to slow the increase in prices. Still, the median sales price in Clark County is over $530,000.
What does a potential homebuyer do with all of this information? Talk to one of the many excellent mortgage lenders in Clark County. Find out how much house you can afford in this interest rate environment. Consider the theme “Marry the house, date the rate.” In other words, find a house that you can afford now, especially if your only alternative is to pay rent, knowing that most people do not stay in a house through the whole term of their mortgage and, if you do stay in the house a long time, opportunities to refinance will arise when interest rates change.
If you’re waiting for prices or interest rates to come down, you could be waiting a long time. Interest rates may continue to go up, and housing prices are unlikely to drop when the supply versus demand imbalance exists.
Talk to a lender. Talk to a Realtor. If you don’t know any, call us and we’ll direct you to one of the many professionals we are blessed to work with, and they’ll be happy to answer any questions. Don’t just wait for “someday when houses are cheap again.” Next time you are buying or selling real estate, call or email! Clark County Title wants to be part of your real estate team!
From your friends at Clark County Title,