Hi everyone! It’s Jennifer Young with Jennifer Young Homes and I wanted to take a minute and talk about interest rates. As everyone probably knows, interest rates have gone up a little bit recently. They’ve recently increased about half a percentage point in the past 30 days.

This is important because it raises an average buyer’s mortgage payment by about a hundred to a hundred and twenty-five dollars. While it’s not a huge increase, it does impact their mortgage payments. A lot of buyers become more price-conscious and start looking at lower price ranges.

What we really want to watch is what interest rates are going to do. Some lenders are saying they will continue to go up; others are saying they will level off around this four to four and a quarter price range. And we want to watch this because interest rates and prices have an inverse relationship. Typically when interest rates go up, prices go down and so if we have a huge spike in interest rates I do think we’re going to see some prices soften.

Right now the slight interest rate increase hasn’t made a huge impact on prices. We have seen buyers, especially first-time buyers, be more price-conscious because they are more heavily leveraged on mortgages. Thus more affected by interest rate changes.

Right now the market is pretty strong. At the beginning of December we’ve seen strong buyer activity. I think a lot of that’s from buyers who want to lock in before the interest rates go up. And a lot of sellers take the house off the market and that leads to a lower supply available. You have buyers who want to buy because they want to lock in a long-term low-interest rate and not a lot to choose from. A lot more listings come on after the beginning of the year and we think we’re gonna have even more activity. Especially if interest rates stay in the low fours.

If you’d like to talk about buying or selling, give us a call! Thanks