WHAT RISING INTEREST RATES MEAN FOR THE MARKET
Updated: Jun 21, 2022
Well, that escalated quickly!
Less than 6 months ago, we were talking about how interest rates were the lowest in history, and now they’ve crept up just above 6% in the last week. I think we all knew they wouldn’t stay that low forever, but no one predicted they would rise this quickly! While this is typically thought of as a negative for purchasing a home, we wanted to give you our thoughts on why there are some benefits to rising interest rates in this ultra-competitive home market in the Portland area: As you’re aware, the real estate market has been a whirlwind for well over a year now due to very low home inventory and high demand. Home prices have shot up thanks to dreaded home bidding wars for what seemed like every single home on the market. Seeing 10+ offers with homes selling for at least $100k over list price was the norm. Thankfully, rising interest rates have aggressively slowed this trajectory for the time being. With rates so low in the past year, many people were enticed to test the housing market simply for the fact that they could lock in a sub 3% interest rate. And even with intense bidding wars so prevalent, the market still wasn’t slowing down. We knew at some point people would get fed up with the market being so competitive, but it wasn’t until the quick rise of interest rates that buyers truly started to slow their home search. This sudden and drastic reduction of buyers looking to purchase a home is directly thanks to the higher interest rates causing them to take a step back. This, in turn, has lowered current demand for homes, eliminating the crazy bidding wars that felt intimidating to so many buyers. We’re now seeing many homes sit on the market with price drops after just a few weeks. Despite higher rates, this is still good news if you’re looking to buy - home prices are finally beginning to normalize, and you won’t have to compete with multiple offers constantly (thank you interest rates)!
Why Buying Now Is Still A Good Idea:
As we expect home values and prices to continue to grow year after year, buying a home and starting to build equity is as important as ever. Even if you don’t like where interest rates are currently, just getting into a home sooner rather than later will benefit you in the long run.
Remember, you can always refinance once rates drop again, and the amount of equity you will have built in your home by the time you refinance will outweigh the cost of refinancing!
Welcoming A New Brand Identity
Our move to Keller Williams Realty and rebranding our marketing was quite the undertaking, but we have now settled in and feel awesome about our new designs! Our updated website is launched and we are hitting the ground running with our new marketing materials.
We’d like to say a special shoutout to our web designer and marketing guru, Renee St.Clair with Ink & Vellum, as we couldn’t have done all this without her expertise!
Giving People The Benefit Of The Doubt
We’re undeniably in some very unprecedented times right now for many reasons, and that has caused extra stress on just about everyone. Whether it’s societal, political, or economic, everything seems to be adding weight to our collective shoulders these days. While it’s easy to get wrapped up in all the negative hoopla, this month we encourage you to join us in doing your best to give people around you the benefit of the doubt and be patient with one another - whether it’s family, friends, or strangers. Everyone is dealing with something right now, and our world needs more empathy and love in times of hardship. Whether it’s telling a loved one how appreciative you are or holding the door open for a stranger, we encourage you to take that extra step to brighten someone’s day or show a random act of kindness. Have you done or heard of an awesome random act of kindness recently? Or do you have a great idea for one you want to try? Comment and tell us about it! We love hearing from you and always want to do what we can to bring joy, compassion, and light into the world.