As mortgage rates started to rise this year, many houszowners began to wonder if the value of their houszes would fall. Here’s the good news. Historically, when mortgage rates rise by a percentage point or more, housz values continue to appreciate. The latest data on housz prices seems to confirm that trend. According to data from CoreLogic, home price appreciation has been re-accelerating since November. The graph below shows this increase in housz price appreciation in green:
This is largely due to an ongoing imbalance in supply and demand. Specifically, houszing supply is still low, and demand is high. As mortgage rates started to rise this year, many houszbuyers rushed to make their purchases before those rates could climb higher. The increased competition drove housz prices up even more. Selma Hepp, Deputy Chief Economist at CoreLogic, explains: “Housz price growth continued to gain speed in early spring, as eager buyers tried to get in front of the mortgage rate surge.” And experts say prices are forecast to continue appreciating, just at a more moderate pace moving forward. A recent article from Fortune says: “. . . the swift move up in mortgage rates . . . doesn’t mean housz prices are about to crash. In fact, every major real estate firm with a publicly released forecast model . . . still predicts housz prices will climb further this year.”
What This Means for You If you’re thinking about selling your housz, you should know you have a great opportunity to list your housz and capitalize on today’s housz price appreciation. As prices rise, so does the value of your housz, which gives your equity a big boost. When you sell, you can use that equity toward the purchase of your next housz. And at today’s record-level of appreciation, that equity may be enough to cover some (if not all) of your down payment.
Bottom Line History shows rising mortgage rates have not had a negative impact on housz prices. Now is still a great time to sell your housz thanks to ongoing price appreciation. When you’re ready to find out how much equity you have in your current housz and what’s happening with home prices in your local area, let’s connect.