Do Home Prices Rise As Interest Rates Fall, And Fall As Interest Rates Rise?


Do Home Prices Rise As Interest Rates Fall, And Fall As Interest Rates Rise?
By Scott Rogers • August 18, 2022
Q: Do Home Prices Rise As Interest Rates Fall, And Fall As Interest Rates Rise? A: Sometimes In the graph above I tracked the median sales price of single family homes sold in Harrisonburg and Rockingham County over the past 20 years (blue line) as compared to the average mortgage interest rate (orange line) to try to answer the question above. I then looked for years where there was a significant increase (or decrease) in the median sales price paired with a significant decrease (or increase) in the mortgage interest rate. I found 7 years where this happened... out of 20 years. There were also plenty of years where the two metrics tracked alongside each other in the same direction... prices fell while rates fell... or prices rose while rates rose. So... it does not seem that a decline in rates is likely to necessarily result in higher prices... or that an increase in rates is likely to necessarily result in lower prices. Though, of course, sometimes (not usually) that does happen. The question is asked, of course, in the context of rapidly rising mortgage interest rates. The answer we are all seeking, of course, is whether these higher rates will result in lower sales prices. History does not indicate that will definitely happen, but it is certainly possible given how higher mortgage interest rates affect how much a buyer can pay for a house and how many buyers can qualify to buy any given house. Receive Updates by Email Recent Articles: Is There A Price You WOULD Pay For This House? There Are Plenty Of Types Of Houses That Exist That Just Are Not Available To Purchase Home Sales By Price Range In The City Of Harrisonburg Are You Compromising On Aspects Of Your Next Home That You Can Or Cannot Change Later? How Much Slower Are The Winter Months In Our Local Housing Market? Rockingham County and New Home Sales Drive Surge in Area Housing Market Find The Balance Between Optimistic And Realistic Home Pricing Room Size Is Difficult To Understand Solely From Real Estate Photos How Much Would You Value Not Having To Prepare Your Home For Showings? One Out Of Four Homes Is Taking Longer Than A Month To Sell
Have any questions? Contact Scott Rogers at 540-578-0102 or scott@funkhousergroup.com
Based on information from the Harrisonburg-Rockingham Association of REALTORS® or its MLS, for the period Jan 1, 2000 through Nov 22, 2024 (unless otherwise noted).
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