How do rising interest rates and low inventory levels impact you as a homebuyer or seller? I’ll explain today.
It’s March, and the big story in real estate right now is about inventory and mortgage rates.
We have a very low supply of inventory. It’s actually down 7% from the same time last year. That means there are fewer choices for buyers and less competition for the home sellers out there. Those who act quickly and list their home right now would benefit greatly from additional exposure to buyers before the flood of competition hits the market in the next few months as we enter spring and summer.
We are also beginning to see the rates for 30-year fixed mortgages increase. About six months ago, rates were in the high 3% range. Now, rates are bouncing around in the 4.75% to 5% range.
When interest rates go up, that has an impact on how much a buyer can borrow to purchase a home. For example, with a 3.75% interest rate, a buyer could qualify for a $600,000 mortgage. If rates increase to 5%, that same buyer would only be able to qualify for a $550,000 mortgage.
The bottom line is that with low inventory and historic low interest rates, now is still a great time to get involved in the real estate market.
If you have any other questions about our current market, just give me a call or send me an email. I would be able to help you!