The Ups With the Downs - Don’t Expect Rising Mortgage Rates to Lead to Falling Housing Prices in the San Luis Obispo Market.
In markets past, there may have been the expectation that with rising mortgage rates, buyers will stall causing the housing prices to drop to drive activity. However, the law of Supply and Demand is still governing the market with an iron scepter.
In fact, the last six times that interest rates increased by at least a percent or higher, the housing prices still rose steadily between 2-11% seasonally.
On the effects of higher mortgage rates, the Freddie Mac report concluded that prices are not adversely impacted with moderate rate hikes. The report also explained that while there may be a drop in the demand for homes as some buyers are on standby hoping for a shift, sellers, also being buyers, will put their intentions to sell on hold; not wanting to surrender the advantage of the lower interest rate they may currently be in. As both supply and demand move in synchronicity, they have offsetting effects on price.
The ebb and flow, as a result of the hem and haw, will preserve the harmony of yin and yang and all’s still well with the market’s soul. There is no indication that prices will be dropping any time soon and interest rates still being historically low, NOW is still the time to take action and MOVE!