We all know that available real estate inventory is low, and buyers are bidding up home prices. Many listings have multiple over-list-price offers.
Inflation is the highest it’s been since 1982.
The Federal Reserve Bank, “The Fed”, has indicated that they will likely raise interest rates 3 times this year.
GIVEN SCARCE HOME INVENTORY AND WITH HIGHER INTEREST RATES EXPECTED, ARE WE APPROACHING A DOUBLE WHAMMY?
Let’s say a buyer can qualify for a $3,000/month mortgage payment. At a mortgage interest rate of 2.5%, that equates to a mortgage amount of about $761,000. If mortgage interest rates go up to 4.5%, that same buyer now can only qualify for a mortgage of $594,000. At 5.5%, the buyer can only qualify for $530,000; a $231,000 reduction in purchasing power.
So not only have homes prices skyrocketed, but when interest rates rise the problem is compounded by the fact that buyers will only be able to qualify for lower mortgage amounts.
If you have a real estate requirement, I would be honored to help you assess your options and assist you in a developing a strategy to move forward.
Please call me at 828.707.7699