As mortgage rates started to rise this year, many homeowners began to wonder if the value of their homes would fall. Here’s the good news. Historically, when mortgage rates rise by a percentage point or more, home values continue to appreciate. The latest data on home prices seems to confirm that trend.
According to data from CoreLogic, home price appreciation has been re-accelerating since November. The graph below shows this increase in home price appreciation in green:
This is largely due to an ongoing imbalance in supply and demand. Specifically, housing supply is still low, and demand is high. As mortgage rates started to rise this year, many homebuyers rushed to make their purchases before those rates could climb higher. The increased competition drove home prices up even more. Selma Hepp, Deputy Chief Economist at CoreLogic, explains:
“Home price growth continued to gain speed in early spring, as eager buyers tried to get in front of the mortgage rate surge.”
And experts say prices are forecast to continue appreciating, just at a more moderate pace moving forward. A recent article from Fortune says:
“. . . the swift move up in mortgage rates . . . doesn’t mean home prices are about to crash. In fact, every major real estate firm with a publicly released forecast model . . . still predicts home prices will climb further this year.”
If you’re thinking about selling your house, you should know you have a great opportunity to list your home and capitalize on today’s home price appreciation. As prices rise, so does the value of your home, which gives your equity a big boost.
When you sell, you can use that equity toward the purchase of your next home. And at today’s record-level of appreciation, that equity may be enough to cover some (if not all) of your down payment.
History shows rising mortgage rates have not had a negative impact on home prices. Now is still a great time to sell your house thanks to ongoing price appreciation. When you’re ready to find out how much equity you have in your current home and what’s happening with home prices in your local area, let’s connect.
Fontaine Family – The Real Estate Leader was awarded 2019 Maine Family-Owned Business of the Year, voted Best Real Estate Company in the Greater Lewiston/Auburn Area and Greater Portland Area, recognized by Real Trends as America’s Top 250 Real Estate Team and published in the Wall Street Journal in the Top 250 Real Estate Professionals ranking in the top ½ of 1% of Realtors outperforming 99.9% of the nation’s Realtors. Fontaine Family Team serves 8 counties – Androscoggin, Cumberland, York, Sagadahoc, Oxford, Kennebec, Franklin and Somerset – in two locations, 336 Center Street in Auburn and 432 US Route One in Scarborough. For more information visit BrendaFontaine.com, download our new app “Fontaine Family Real Estate” or call (207)784-3800 or (207)289-3830.