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Offered by: Jan Hepp-Struck, Hepp Realty

What a diff erence a few months can make! In my May market update I spoke of navigating through uncharted waters and that is still the case, but the winds have shifted some since then which has had some impact on our housing market. The biggest factor—earlier in the year interest rates were predicted to stay under the 4% mark through the end of 2022. But that was before persistent inflation forced rates past that prediction and into the low to mid 5% range on the average 30-year fixed-rate mortgage (Freddie Mac) in June.

According to Realtor.com and economic experts, the nearly two percentage point difference between the initial prediction and the actual rate increase is a game changer. That difference, while it may not seem like very much, extrapolates out to about a 20% increase in a monthly mortgage payment on a median-priced ($447,000) home. Realtor.com economists are now predicting a little cooling on home price increases and a slight slowing in home sales because potential buyers on the lower median income curve have been forced out of the equation. Economists remind us, however, that while this may sound like reason for concern, the reality is that because of the explosive sales numbers from last year, the current market is still starting at a residual higher price point, and there is no reason for panic because even if prices do fall, over all the market is still on track for an historically good year, and we’re a long way from a crash.

There is some welcome news for buyers though because all these factors should lead to a boost in available inventory, potentially upwards of 15%, an increase from the prior prediction of less than 1% (Realtor.com)

For proven expertise in establishing your home value and/or searching for a new or existing home, please call Jan at (303) 520-4340.

Hepp Realty