Home Sellers Will Not Voluntarily Sell Their Homes For Lower Prices Because Of Higher Interest Rates Unless Competition Forces Them To Do So


Home Sellers Will Not Voluntarily Sell Their Homes For Lower Prices Because Of Higher Interest Rates Unless Competition Forces Them To Do So
By Scott Rogers • May 22, 2023
Quite a headline, I know. All for something that isn't actually happening in the local market. Here it is again... Home Sellers Will Not Voluntarily Sell Their Homes For Lower Prices Because Of Higher Interest Rates Unless Competition Forces Them To Do So Looking back a bit... Mortgage interest rates declined from 5% to 3% between 2018 and 2020 and then remained around 3% until early 2022. Median sales prices rose from $212K to $300K between 2018 and 2022. When mortgage interest rates started rising (quickly) in early 2022, many thought or said... Home prices rose so quickly between 2018 and 2022 (+41%) because mortgage interest rates were so low. ... and ... Now that mortgage interest rates are rising, home prices are destined to decline. We're now more than a year past the rising / higher mortgage interest rates and what can we now conclude? [1] It is quite possible that the rapid rise in sales prices between 2018 and 2022 was partially fueled by super low mortgage interest rates. That wasn't the only thing that caused home prices to increase, but it definitely kept sales moving briskly and prices rising quickly. [2] Despite mortgage interest rates rising from 3% to 6% in a year's time, home prices have not declined in the local real estate market. Which is what causes me to conclude that... Home Sellers Will Not Voluntarily Sell Their Homes For Lower Prices Because Of Higher Interest Rates Unless Competition Forces Them To Do So Certainly, if higher mortgage interest rates slowed down home buyer activity AND if inventory levels started to rise... then we might see home prices start to flatten out or decline as sellers competed with other sellers to attract buyers. But now that we're more than a year into having mortgage interest rates higher than 5% (and eight months into having rates higher than 6%) I think it's safe to say that rising mortgage interest rates have not caused home prices to decline in our local market. Receive Updates by Email Recent Articles: 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 Consider The Cost Of Your Planned Renovations When Planning Your Offer
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 21, 2024 (unless otherwise noted).
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