Interest is the only thing that seems to interest buyers and sellers these days. Will the interest rates affect sales? How about my purchasing power? How high will interest rates climb? Will this cause a housing bust? Regular and super knowledgeable guest Dan Coffey joins us again today to share his insights and provide info about today’s rates, where he sees them going tomorrow, and why they’re not – and won’t be – where they were yesterday. Whether you’re a buyer wondering if you should “wait it out” until the next housing bust or a seller wondering if now is a good time to list, this episode is definitely one to listen to.
Let’s look the home sellers perspective. Well I have bad news, the days of 20-30 offers are pretty much gone. There will be multiple offers depending on the type of property but less. Also, expecting buyers to throw money like it was 2021 is a thing of the past. There will be friction moving forward as sellers expectation adjust to market reality. As a seller, pricing your home according to market conditions and having realistic expectations is important.
As for homebuyers, good and bad news. The bad news, the cost of borrowing has increased but it’s not that bad. For example, let’s say you have a mortgage a $500,000 mortgage which will cost you a 1% more than it did last year. 1% of $500,000 is an additional $5000 of interest annually. On the flip side, less buyers demand means less competition. Less competition means less chance of getting into situations where buyers have to pay additional tens of thousands of dollars.