Posted 5/12/2022 13:38 (#9657742 - in reply to #9657409) Subject: RE: Real estate buying question.
Interest rates are getting higher but looking big picture 6% isn't that high. It's just that we have been conditioned to interest rates at 5% and below. In high-cost areas, like here in NJ, property taxes often cost the same as the principal and interest on a mortgage. The payment increase due to, lets say a 1/2 point jump on a 400k note, along with the high taxes, makes the house unaffordable. Granted, if a 1/2 point is what breaks the deal, it, in my opinion, was too close to begin with, but that's how people live.
By the end of the summer, rising interest rate should slow the market down to a normal pace of 30-45 days on market. Good news for sellers, but bad for buyers, is that we still have a housing deficit caused by the bust of 2008, and it's going to take some time to correct that deficit, so expect home values to remain elevated.