Are mortgage rates on their way up? What does that mean for you?
Mortgage interest rates have been rising throughout 2018, and they’re expected to jump to 5+% in 2019 as home prices continue to increase.
If you’re hoping to sell your home in the near future, this rate increase will likely have an impact on the buyer pool. With increased interest rates, home buyer purchasing power goes down (meaning someone who might have been able to afford your home at a lower interest rate is now only able to afford lower-priced homes).
But rising interest rates aren’t the only thing to take into account.
Supply and demand also play a big part in selling your home. If more homes are available, prices go down. If fewer homes are available (something that’s definitely the trend in our part of North Carolina at the moment), home prices will probably increase. Same with demand: if more people are looking for homes, prices will most likely go up, whereas if there are fewer buyers overall, prices will likely fall.
Yet another component to consider is average income in your area. If income is increasing along with mortgage rates, you have less to worry about (because potential buyers will be more able to absorb higher rates).
So yes, an increase in mortgage rates can certainly have an affect on the sale of your home, but it’s not the only economic indicator to consider as you estimate what your home selling experience might look like -- and how much you might be able to get for your home.