Why Prices Keep Going Up

One reason why home prices are going back up is because there still aren't enough homes  for sale for all the people who want to buy them.

Even though higher mortage rates cause buyer demand to moderate, they also cause the supply of available homes to go down. That’s because of the mortgage rate lock-in effect. When rates rise, some homeowners are reluctant to sell and lose their current low mortgage rate just to take on a higher one for their next home.

So, with higher mortgage rates impacting both buyers and sellers, the supply and demand equation of the housing market has been affected. But since there are still more people who want to purchase homes than there are homes availalbe to buy, prices continue to rise. As Freddie Mac states. 

“While rising interest rates have reduced affordability—and therefore demand—they have also reduced supply through the mortgage rate lock-in effect. Overall, it appears the reduction in supply has outweighed the decrease in demand, thus house prices have started to increase . . .”

Here’s How This Impacts You

• Buyers: If you've been waiting to buy a home because you were afraid its value might drop, knowing that home prices have gone back up should make you feel better. Buying a home gives you a chance to own something that usually becomes more valuable over time..


• Sellers: If you've been holding off on selling your house because you were worried about how changing home prices would impact its value, it could be a smart move to work with  T & K Real Estate and put your house on the market You don't have to wait any longer because the most recent data indicates home prices have turned in your favor.

CONCLUSION

If you put off moving because you were worried that home prices might go down, data shows they’re increasing across the country. Let’s connect so you can understand how home prices are changing in our local area.