Why Are High Interest Rates A Good Sign?
Why are mortgage rates up?
Interest rates are as high as they have ever been, currently around 7.8%. That is because non-farm payrolls jumped, which means more people are employed. In fact, 336K new jobs were reported this month! While these higher interest rates can make us long for years past, they are actually a good sign that we are in a stronger economy.
How is the market doing?
New listings are starting to decline toward the end of the year, which is normal in the annual cycle; however, the number of active listings is still low. Days on market and months of supply are starting to climb, which means properties are taking a little longer to sell. Home prices have peaked for the year and are cooling down going into the holidays. Listings closed at around 100% of listing prices in September; however, we expect that to decrease between now and the end of the year. This is good for our buyers and slightly challenging for our sellers. We are keeping an eye on the market to see if it reverses in the new year which is typically a stronger market than the end of the year according to history.
How does that affect you going forward?
?Interest rates chase the economy, not the other way around. If the economy is inflating, interest rates follow to slow it down, and vice versa. The double-edged sword is that when the economy is strong, more people are employed but interest rates are high. When more people are struggling that's when the fed steps in and lowers interest rates. If you are able to afford to buy a home despite the higher interest rates, this is a good time of year to jump in and get a fair deal. If you are thinking about selling, contact us immediately so that we can advise you on how to use these next couple months to do any renovations so you are ready to hit the market after the holidays.
Please let us know how we can help you achieve your real estate goals and share this email with a friend who is thinking about buying or selling!
