Will Increasing Mortgage Rates Impact Home Prices?
There has been some discussion lately on home prices in relation to mortgage rates. I believe if there is a rapid rise of mortgage rates, the increase in home prices will be affected. Logically it makes, because purchasing power will be reduced as interest rates rise. I do not think the rate increase will be rapid, but will be gradual over time to help cool inflation. If rates went up too quickly it would have a dramatic impact on not just housing prices but the entire economy. The current low rates nation wide have helped the values of real estate to increase dramatically.
We still have a real estate housing shortage in Wasilla and Palmer market. Inventory is currently at an all time low helping to promote multiple offers over the list price.
As long as there is a housing storage with high demand prices will continue to increase. Small increases in interest rates should help to decrease some of the demand. There have also been some lending changes on investment property that will require a higher down for some investments. We are starting to see minor adjustments in the market aimed at curbing the runaway inflation. It is doubtful that prices will start falling anytime soon. However, the rate prices have been climbing may slow.
Time will tell....