I have listened to people who have been in such turmoil over the current interest rates. Mortgage interest rates historically have been sporadic.
Approximate mortgage interest rates over the decades:
1970’s – 7.20 – 12.00%
1980’s – 9.75 – 18.50%
1990’s -6.95%- 9.50%
2000 – 7.00% – 8.25%
2005 – 5.50 – 6.25%
2010 – 4.20 – 5.10%
2015 – 3.60% – 4.00%
2020 -2.25% – 3.51%
2021 – 2.80% – 3.11%
2022 – 3.50% – 5.50%
Many things effect the mortgage interest rates and the real estate market. There are a number of opinions out there and I, of course, have my own. Mortgage rates dropped substantially and all -time historical low, in 2020. People were selling their properties like hot cakes because the historical low interest rates made it affordable to buy a property that normally a certain buyer wouldn’t be able to qualify for or afford with the higher interest rates. When a seller closes on their property, naturally they have to find another replacement. They either bought another property, moved into an additional property they already owned or possibly built a home. Some sellers (I will not say all) with profits were in a catch 22. They sold their property and had a profit; however the catch was can they now find a property for what they originally had for the money they paid for the property and for money they had gained. For some, the answer was yes and for some, the answer was no. This is a very subjective topic and I digress.
So the number question I have been hearing is, “Jaime, did I miss it? Did I miss the market? Did I miss the buyer frenzy? Did I miss the low interest rates?” My answer – Yes you missed it. You missed the low historical interest rates. However the interest rates are continuing to rise and that is our new norm and that is reality. Over 5% is still an amazing interest rate. You can see that with the historical data I have shared above. The average sales price in Hopkins County jumped substantially over the historical low interest rates. In my opinion, we can’t sustain those types of gains and we need a normal market. We are now seeing what is our new norm. Days on the market are slowly rising. And that’s totally ok! It is still an amazing time to buy and sell. It’s still a great time to still be a part of investment real estate. The world didn’t stop turning, I mean look at the “Days of Ours Lives” soap opera, that show is still alive! Life events are still happening such as families outgrowing homes, people still need to downsize homes, people are still relocating for different reasons, etc. Do not let the news and other “Negative Nancies” stop you from living your life. Your house might not have multiple offers right now and sell within one day of the market. Take a deep breath, everything changes and so does the real estate market. Your property is going to find the right buyer. Think of it this way, a buyer might have just seen your property for sale and it had been on the market for 10 days and they are so thankful because their prayers were answered. Everything in the real estate market is relatable to the way everything in our economy is right now. We have to live in the right now and not in the past. Until next time, happy home buying and selling!
