Inflation and higher rates have slowed the market, but is that over?
Over the past six months, rising mortgage rates have slowed the red-hot housing market. As home price growth has slowed, we’ve seen only four homes sell in the previous month. The average 30-year fixed mortgage rate has doubled this year, and it is affecting buying power.
Last month, the average rate for financing a home briefly rose over 7% before coming back down to around 6%. However, we’re starting to see a hint of what mortgage interest rates could look like in 2023. Inflation is the enemy of long-term interest rates. As long as inflation is high, we’ll see higher mortgage rates.
“The market will be fine going into the new year.”
In the past couple of weeks, we’ve seen indications that inflation may be cooling. The mortgage market is eagerly awaiting positive news on inflation. What does this mean for the future of mortgage rates? The bottom line is that mortgage rates will come down—it’s just a matter of time.
This will give prospective buyers more buying power and lead to more homeowners throughout the country. The market will be fine going into the new year because sellers still have to sell and buyers still have to buy, regardless of the interest rates.
If you have any questions about trading up to a new home or selling your existing one, feel free to call us at (602) 920-0306 or send us an email. We can help you make the right decision. We appreciate you for trusting us with your real estate needs. Happy holidays!
