Dfw Moves Blog Will Rising Rates Affect Home Values?

Mortgage interest rates havenbsp;risen over a quarter of a point in just the first two months of 2018, nbsp;and Freddie Macs US Economic and Housing Market Outlook is projectingnbsp;a steady increase of interest rates throughout the year,nbsp; Many suggest rates could reach 5 by the end of the year. Now those of us who have been around a while recognize 5 interest rates are still a gift, having seen ratesnbsp;much higher in the past.nbsp; Several of us who were in the market in the mid to late 1980s even remember 12-14 rates.nbsp; Still each increase, especially when combined with increasing housing prices, bodes poorly fornbsp;homebuyers sitting on the fence. What impact will rising rates have on home values? Just as in years past, Im starting to hear some potential home buyersnbsp;justify their fence sitting position by saying increasing rates will have a negative effect on housing prices in Keller, Southlake, and Trophy Club.nbsp; Their logic is that as rates rise fewer buyers will be able to qualify for a home loan.nbsp; And that does make sense; if there is less demand home prices should decline.nbsp;nbsp; But what these fence sitting home buyers arent factoring in is the good economy.nbsp; Rising mortgage rates typically bring out more prospective home purchasersnbsp;who want to lock in the lower rates.nbsp;nbsp; ldquo;Mortgage rates have risen 1 or more ten times in the last 43 years, with little impact on home sales and prices when the economy was also stronghellip;Historically, rising confidence, solid job growth, and higher wages have more than offset reduced demand for housing resulting from higher mortgage rates. Rick Palacios Jr., Director of Research atnbsp;John Burns Real Estate Consultingrdquo; nbsp; History shows when mortgage interest rates dramatically increased home prices appreciated too.nbsp; Now most are not expecting quite the same steep increase in rates this year as in the chart above.nbsp; Most experts are suggestingnbsp;an increase of just 1 by years end. That would be in line with the 1 increase mortgage rates climbed in 2013, going from 3.41 to 4.43.nbsp; And I think we can all agree housing prices only went up in 2013.nbsp; The national average home price increase, similar to the Dallas-Ft. Worth area, was 9.8. Bottom Line If youre at all considering a move, perhaps its time we meet.nbsp; Id be happy to sit down with you and help you calculate payments, discuss closing costs and show you what it may take for you to lock in a home at todays interest rates.nbsp; And there wont be any pressure, just an opportunity to see if now is the right time for you to make a change.nbsp; Just give me a call and lets get started.