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Why Higher Interest Rates are Not Crashing Home Prices

jay80956

Updated: Nov 21, 2023

It comes down to supply and demand.

It was over 22 years ago when mortgage rates were last in the current range, recently over 7%. This dramatic rise in rates over the past 18 months has understandably compelled many home purchasers to pause their efforts to purchase.

What may be surprising is that the number of homes offered for sale is down even more at 38.3% from the year earlier. This means that home sellers have retreated from the market in greater numbers than home buyers. Higher rates have had a greater impact on sellers than buyers, because more sellers are choosing to not sell, even if they are buying another home. When more buyers seek new homes to purchase than owners who want to list their home for sale, the tight market results in stable to increasing home prices, though with fewer sales transactions.

The bottom line is this: If you're thinking about selling your home, you need not worry about selling at a price below what you think it's worth. With inventory of available homes so low, there is little competition from other sellers. In fact, it's actually a good time to sell because it's not as competitive as it once was.

Are you interested in receiving statistics for your own county or city? Contact me and I'll send them to you. If there is anything else I can do to be of service, please contact me or post your questions and comments here.



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