11 Dec The Truth About Rising Interest Rates
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With 2018 coming to a close, there has been a lot of speculation on what interest rates will look like in 2019. After searching through resources such as Realtor.com, Fannie Mae and Freddie Mac, we can expect interest rates to fall between the low to mid 5% in 2019. This means that the average home purchase will be 8% more expensive per month than in 2018. What does this mean for buyers and sellers?
We’re seeing an increase in inventory; however, the majority will not be entry-level. Most of the new inventory we are seeing is focused in the mid to higher-end price range. This may prove to be rough with first time home buyers. It is very unlikely that we will see rates drop within the next year. Buyers should consider locking in a rate sooner rather than later.
2019 will remain a seller’s market, but with more competition. The mid to higher-end price range homes may find it will take longer to sell. It will require a good Realtor and proper strategy to sell your home. Offering incentives, such as price cuts, will help sellers stay competitive in this market and still make a profit. Doing minor fixes around your home will also help make it more appealing to buyers.
The increase in inventory is more the result of a decrease in demand because of rising interest rates. As said before, the boost in inventory will mostly occur in the pricier range of homes. However, this could provide some wiggle room for people looking to upgrade their home. In turn, it may expand the number of entry-level homes on the market.