What does that mean for buyers? On January 19th, interest rates were 3.5%. A loan on a $1,000,000 home with 20% down would have cost a buyer $3,592/month principal and interest. That same loan today (at 5.28%) is $4,482, a 25% increase.
Consequently, we are seeing a subtle shift in the number of showings and the quantity and aggressiveness of offers on our listings. Whereas before we may have seen offers go as much as 20% over asking, lately, while still above list price, offers are closer to 5% or maybe 10% over as buyers' affordability scales down.
Less motivated buyers and investors may opt out of the market as today's dollars don't get them as far. For buyers, this subtle loosening of competition will feel like a breath of fresh air. Well-prepared sellers will continue to know that their home will sell quickly and at a strong, fair market price when they have decided that it's the right time to move.
As we come into the second half of the spring market, when we traditionally see a bump in inventory, we're paying close attention to absorption rate and rate of price appreciation. If we see either of these slow, it could be the first signs of a return to a more balanced, sane market.
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We're asked every day how rising interest rates are affecting the market.
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Wydler Brothers have been selling residential real estate for over 20 years in the DC metro area. They rapidly ascended the local landscape and built the highest producing team in the entire region, recently named #28 in the US, Top 2 in the DMV and #1 in Virginia Large Team by Volume by Real Trends Magazine "The Thousand" in 2021.