Sellers Have an Opportunity with Today’s Home Prices

As mortgage rates started to rise this year, many homeowners began to wonder if the value of their homes would fall. The good new is, 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:

Sellers Have an Opportunity as Home Prices Re-Accelerate | MyKCM

This high appreciation is largely due to housing supply remaining low while high demand persists. As mortgage rates began to sharply rise earlier this year, many homebuyers rushed to make their purchases before those rates could climb higher. This 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, 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.”

Given these trends, your sellers have a tremendous opportunity in front of them. As market appreciation has been substantial over the previous 18 months, prices are at an all time high for them to take advantage of. While buyer interest remains elevated and before mortgage rates can rise any higher, listing today will allow them to ask for top dollar before the market transitions even further. Though prices are not projected to decline to any substantial degree on a large scale, slowing appreciation and a more balanced market will only present your clients with less leverage.

Bottom Line

History shows rising mortgage rates have not had a negative impact on home prices. Now is still a great time to encourage your clients to sell their house, thanks to ongoing price appreciation. As a starting point, remind them how much equity they have in their current home and what’s happening with home prices in your local area.

Please follow and like us:

Leave a Reply