You are probably already aware that mortgage rates have been ascending for most of this year and are now above 5%, on average, for a 30-year loan.
This is a situation we have been tracking in our email communications with you for some time and now we are seeing the results of these rising rates.
The graphs above show the relationship between interest rates over the past year and the number of mortgage loan applications nationally.
We can easily see the direct effect of rates in terms of the declining rate of applications, seen most dramatically here in the lower amount of refinancing in the market.
It’s safe to say the wave we experienced the last 18 months has crested.
Moving forward the biggest question will be: Does the wave come crashing down…? Or, will it gradually roll out into a more normalized market?
Many forecast a market correction upwards of 20% by this time next year. We have definitely started seeing activity slow down in properties over $800K. It’ll be interesting to see how it plays out over the next few months.
The first thing to say is that our market isn't typical of the bulk of the USA. Significantly, it's a sought-after location for folks migrating out of states like California, many of whom are cashing out and paying for an Iron County home with no need for a mortgage.
And even if prices were to correct here by as much as 20%, we've seen values in this area jump by nearly 40% since early 2020 so, however you look at it, we are likely to remain in a very positive situation.
Right now, as the graph below demonstrates. median sales price for Iron County continues to increase, month-on-month, to the highest level ever seen, further reinforcing that our market is likely to remain very resilient.
Nonetheless, it would be a mistake to think that the overall dynamics of the market aren't changing to some degree, as indicated in the above graph which compares home prices with median incomes. Therefore it's arguably a good idea to assess where you are with your own home equity and to list at a time when there is still excellent demand and growth in returns.
A quick, free and convenient way to do this is to check out your home's value using our online home valuation tool - click here to try it.
Alternatively why not give us a call at 435-327-2090 to discuss your own situation in more detail. We'd love to help.
