For a variety of reasons, some economic, while others, related to the pandemic, so-called, fatigue, etc., house prices, in most areas, have risen by, or, near, record amounts! Due to a long period of artificially created, low-interest rates, mortgage rates have been at historic lows! Since, for most home buyers, access to financing is necessary for recording purchases, when a lower rate leads to cheaper money, and thus, the ability to buy more homes – for – buck, prices usually rise. Goes! This allows qualified buyers to qualify for more money/loans, as the ratio of monthly mortgage to overall income is artificially reduced! How long will this trend continue, will it become the new normal, will the previous trend/cycle return, and how will pricing be affected, immediate, intermediate and long term, are all factors to consider! With that in mind, this article will attempt to consider, examine, review and discuss, in brief, some of the possibilities to consider and understand.
1. short term: Since, as the Federal Reserve Bank announced they planned to raise rates three times in 2022 (of course, this was before the potential impacts, and effects from the Omicron version), many feel pressured, to act quickly. Take advantage of today’s low rates, before moving up! The three increases would probably translate into, at least, a 0.75% higher rate that, for most mortgages, would translate into hundreds of additional dollars per month. A few things to consider, and to note, is this, this rate of increased domestic prices, perhaps, will not continue, especially, by such a large amount! Before proceeding, how much longer a specific home is expected to keep, an issue, to consider thoroughly and wisely!
2. Intermediate – Duration: However, many believe that the exact timing of any projected rate-hike is uncertain! fed have changed, and/or have, in the past, changed their strategies and approaches, including potential inflationary pressures, what the intermediate term may bring, how long the economic situation, and unknown factors, related to the pandemic, etc., will determine, Roughly speaking, what can this stage bring! Moreover, buyers’ attitude, and perceptions, and their beliefs, etc., influence this real estate market to a great extent!
3. Long Term: In the long run, will things restore what we have seen, so often, in the past, that is, in turn, between sellers, buyers and neutral markets? Possibilities include: A sustained large growth; one more – gradual, but persistent – one; to level something; And/or, we will see, at least, in some regions, some sort of falling prices for some period.
Since, no one has a crystal ball, it is wise to fully explore and understand the possibilities, implications and implications! Will you learn as much as you can, so that you can move forward intelligently and well prepared?
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