2022 Real Estate Market Update: Interest Rates – The Silver Lining
Greetings, this is Mark Weithorn here, your real estate trainer, with your market update. Today we are going to talk about rising interest rates and how it affects Realtors.
There’s been a lot of talk about how rising interest rates are going to kill the economy; drag us into a recession. Well, there is a silver lining with increased mortgage rates.
Since Covid hit, people, mostly millennials, have been moving out of their rental apartments and buying homes. This has created a frenzy in the single-family home market. Home prices are up over 20%, there are bidding wars, and inventory levels are at record lows. In fact, inventory levels are dangerously low.
Realtors measure inventory levels using a concept of months supply. Less than 6 months equals low inventory; a seller’s market. You can get your price. More than 6 months supply means too much inventory; a buyers market. You can negotiate for a discount. Right now, we are sitting at one and a half to two months supply. This is similar to walking into a supermarket and seeing empty shelves.
With inventory levels being this low, many Realtors are having trouble making a living.
A rise in interest rates should slow the market down a little. This should bring the months supply up a few months. Possibly to 5 months. This is a more healthy environment. This will give Realtors something to sell.
One last thing to consider. If you look at mortgage rates over the last 30 years they are typically in the 4-6 percent range. Which is where we are now. Back to normal.
Well, that’s this market update. My name is Mark Weithorn with Showcase Web Sites. We have been creating web sites for Realtors for close to 20 years now. You can visit us at DPIshowcase.com And please remember to subscribe and like my YouTube channel to get updated videos. Thanks for listening to my 2-minute tech tip and have a great day.
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