How Mortgage Interest Rates Affect Selling Your Home

Interest rates and selling your house

If you have thinking about selling your home but not sure quite when to do so, here is good news for you! Low mortgage interest rates are real estate friendly. Low rates give buyers more purchasing power which is especially critical for 1st time buyers who have to save enough for a down payment and stretch to make monthly mortgage payments.   More purchasing power also allows established home owners to move up to the home of their dreams.   Over time low rates also support strong appreciation of home values so they are a win-win-win scenario in real estate.

With minor exceptions interest rates have been trending lower for over 20 years as shown below.

 

Mortgage Interest Rate History

Mortgage Rates May 1992 to May 2015 – Reproduced with the permission of Mortgage-X.com

There has been concern recently that the Federal Reserve might raise the Federal Funds rate.   While the Federal Funds rate does not directly affect mortgage interest rates, it does affect the mortgage lender borrowing cost, so mortgage rates tend to follow the Federal Funds rate.   Recent swings in the stock market and global economic concerns appear to have influenced the Federal Reserve to be cautious and perhaps delay any rate increases.   As a result, local mortgage rates are now near record lows, which of course is great for real estate!

With the mortgage economic meltdown in 2008 production of new homes fell.   As we return to reality and release that we all still need a place to live, available housing has been constrained, especially in geographical areas with strong employment markets.   The net result is the total number of homes for sale (new and resales) in the Triangle Area has fallen in recent years.

 

Inventory by Category

Number of homes for sale in the Triangle area – Triangle Area Real Estate Report

In addition, homes for sale in the Triangle are getting snapped up faster.  The following chart shows the percent of homes sold in the 1st 30 days on the market which has been increasing in recent years

DOM less than 30

% of homes sold in the 1st 30 days in the Triangle – Triangle Area Real Estate Report

The net is that low mortgage rates and lower inventories of homes for sale have created a winning streak in real estate and a great time to sell your home. If you have been on the fence about selling your home but not sure when to do so, contact Barbara Green for a free market analysis.

 

 

 

 

 

The opinions expressed are intended to supplement opinions on real estate expressed by local and national media, local real estate agents and other expert sources. You should not treat any opinion expressed here as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of our opinion. We do not guarantee the accuracy or completeness of information, and provides said information without warranties of any kind.

Barbara Green is a real estate professional who specializes in West Cary, active adult, and luxury real estate. If you are looking to sell or buy real estate in the Cary, Apex, or Morrisville area of North Carolina, give me a call or visit my website at www.Cary-NC.com to get started today!

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