The big news this week is obviously the rise in interest rates.
Average 30-year fixed mortgage rates are now at 6.7% which is the highest they have been since July 2007.
So, how is this affecting the market? Here is what we notice…
There are fewer buyers in the market. Sales activity, measured by closed and pending sales, is down 30% compared to last year.
Prices, however, continue to rise. Average prices are roughly 11% higher than last year. This is driven by the market being under-supplied.
Inventory levels, as measured by months of supply, tells us we still have a Seller’s market. There is 2 month’s of supply currently for sale.
Ultimately, we expect the rise in interest rates to slow the pace of price appreciation. We believe the market will return to its long-term average of 6% per year.