Many homeowners wrongly assume that rising interest rates inevitably mean home value depreciation. The truth lies in a deeper analysis: Is our economy growing or slowing?
Today we’ll take a deeper look at interest rates—how they affect your home’s value or your future home purchase.
We’ve noticed that interest rates have continued to rise on a steady basis for the last few years. A common error in thinking is that higher interest rates will have a depressive effect on home values.
There are some variables to consider, though, before drawing that conclusion. First, understand the current economic landscape—are we in a good economy or a flat economy? If an economic slowdown is already in force, interest rates will, indeed, apply downward pressure on property values.
On the other hand, economic growth coupled with rising interest rates will produce a much different result: Sidelined buyers will jump off the fence to lock in a rate before they escalate any further.
“Opportunities definitely await buyers right now.”
Opportunities definitely await buyers right now. The current economic picture for our market is fairly strong, and interest rates are still at historical lows. So, given that the historical average for interest rates has been roughly 8%, there’s no time like the present to get pre-qualified and pre-approved for a home, if your goal is to make a purchase this year.
If you have any questions for me related to today’s topic or real estate in general, feel free to reach out. I’d love to have a conversation with you!