Based on the numbers from the Canopy Realtor Association, the inventory situation in the Charlotte Metro Area is getting slightly better. With interest rates looking like they might rise, what does that do to the recovery of the real estate market?
Typically when interest rates rise, the market slows down. That may not be the case right now. Though rates are looking like they will rise, they are still at historically low levels so it may not slow the market as much as previous raises.
One issue we see when interest rates go up is that first time homebuyers take a step back. This is because a change in rates can mean the difference between approval of a loan and rejection of the same loan. A small change in a percentage can mean hundreds of dollars per month difference in a payment which can be devastating for a first time buyer, and can even deter an experienced buyer.
Many homeowners have been taking advantage of the low rates to refinance existing mortgages. They can be going for a lower payment, or doing a cash-out refinance so they can improve their current home. With rates headed higher, we could see a slowdown of this activity leading to a slowdown for contractors so they can finally catch up on all of the work that has been happening since Covid hit. There have been many materials delays causing schedules to be pushed out making projects more stressful than usual. It would be a relief to have balance back for homeowners and contractors alike.
Interest rates can’t totally be blamed for the craziness of the market right now. There are many other factors that are making many buyers hold off from entering a competitive market where the average home is selling over asking price. The competition alone can deter many sellers as they will have to become buyers to get their next home.
The best hope according to analysts is a robust spring season for the real estate market. Many people who have held off listing their homes will be willing to list in the spring. This additional inventory could bring the market back closer to a balance between buyers and sellers in transactions.
If you are ready to buy or sell a home in the Lake Wylie area, call us at 803-831-8588 to get started. If you aren’t ready yet, but want to buy or sell a home next spring, give us a call and we will help you to get prepared. You can view current listings and create custom searches on our website here.
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