Interest rates are the highest in the past 7 years!!!

Interest rates for buyers with good credit or credit worthiness for a 30 year loan is approximately 4.875% while average buyers fall around 5%. A hike in rates have been talked about since last year with minimal increases until recently. Mortgage rates started around 4% at the beginning of 2018 and have seen a steady increase. With the positive retail sales data and the rising home costs due to low inventory in some of the major markets the interest rate hike is not a complete surprise.
Typically a rise in rates will slow down the rise of prices in this high demand/low inventory market but the demand of today’s buyer has not been derailed by the spike in interest rates thus far. We have had years of low interest rates, now with mortgage rates creeping up to 5% and gas prices rising a correction is looming for the typical buyer.
Borrowers that refinance their current loans make up a smaller portion of the mortgage business than at any time in the past two decades, which poses a challenge for lenders who already fear higher interest rates and climbing home prices could potentially stunt purchase activity.
In a January statement, Fed officials said they expected annual inflation to “move up this year and to stabilize” around the US central bank’s target inflation rate of 2%. The Fed has forecast three rate increases in 2018.
According to local real estate agents the Harford County real estate market is a bit more competitive than Baltimore and Cecil County markets. Properly priced properties typically sell within days of being listed many with multiple offers. This seller’s market may come to a screeching halt with interest rates beyond 5%, so if you are looking to buy or sell, keep an eye on trends and rates. An appraisal can help you make a decision to buy or sell in this ever changing market. Please contact Robinson Appraisal Group for any help you may need in your valuation process.