Sellers Have an Opportunity with Today’s Home Prices

May 24, 2022

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, home values continue to appreciate when mortgage rates rise by a percentage point or more. The latest data on home prices seems to confirm that trend.

According to data from CoreLogic, home price appreciation has accelerated since November. The graph below shows this increase in home price appreciation in green:

Sellers Have an Opportunity as Home Prices Re-Accelerate | MyKCMThis 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 CoreLogicexplains:

“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 at a more moderate pace. 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.”

What This Means for You

If you’re considering 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.

You can use that equity to purchase your next home when you sell. And at today’s record level of appreciation, that equity may be enough to cover some (if not all) of your down payment.

Bottom Line

History shows rising mortgage rates have not hurt home prices. Thanks to ongoing price appreciation, now is still a great time to sell your house. 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.

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