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Real estate buyers looking to see impact of rising interest rates on number of available homes and their prices | Real Estate

Real estate buyers looking to see impact of rising interest rates on number of available homes and their prices

Versión en español

A new stage has begun for the real estate market in Key Biscayne, Miami and throughout the country after the COVID-19 pandemic spurred a boost in prices and sales.

Rising mortgage interest rates are kicking in, threatening to disrupt the unprecedented run in real estate values. The new developments are forcing people to re-evaluate what the future holds.

Home prices and mortgage rates are expected to continue rising, sales expected to fall, and the market to continue to slow. However, one bright spot for frustrated prospective homebuyers: The number of homes on the market will likely increase.

“The number of homes for sale right now is so low that it’s creating ultra-competitive conditions, which are very challenging for buyers,” says Danielle Hale, Realtor.com chief economist. “More homes for sale will help bring more balance and sanity to the market.”

Mortgage rates are already closing in on 6% and are expected to keep rising, a rate that is expected to keep potential buyers on the sidelines. The Federal Reserve is now hell-bent on reining in inflation by raising interest rates, causing mortgage rates to rise.

“The increase in interest rates has changed the basis of the economy, as well as the housing market. Many homebuyers apply for mortgages, so rising rates affect the cost of ownership,” says Hale. “It’s causing buyers to make tough trade-offs and disrupting the housing market.”

This story includes information from MLS and realtor.com

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