Interest rates are up, but what does that mean?
Whether you’re in the industry, in the market to buy, or just watching the economical trends, you’re sure to know that interest rates are up over the past week, and they’re up significantly. January began around 3.25% and slowly rates crept up towards 4%. This week rates quickly spiked above 4.5%, after the fed announced it’s intentions to scale back on stimulus programs.
From Frank E. Nothaft, Freddie Mac vice president, “Higher mortgage rates may dampen some housing market activity but the effect will be muted by the high level of buyer affordability, and home sales should remain strong,”
That couldn’t be more true here locally where real GDP growth, population growth, and employment growth continue to to outpace the national economy. Add to that our state’s operating at a balanced budget, we’re primed to see our “healthy” housing market continue for quite some time.
True, we are facing a shortage of housing inventory in Austin and that’s not going to change for at least 18-36 months. Our real estate is in high demand, and homes on the market move fast! Mean & median home prices are increasing at the same rate as the number of home sales. On top of this, a big percentage of the population is experiencing an increase in affordability– unemployment is decreasing, consumer debt is decreasing while savings/cash reserves are increasing. Austin’s GDP is growing at the same rate as its population. New jobs are coming to Austin. And with high rental rates, buying a house is more affordable for many– especially for newcomers– and those that currently own real estate locally. It’s easy to see why we are rolling at the healthy pace we are and will for some time!
Don’t be negative or hesitant about the low inventory or the 4-ish% rates. This is still below the 6% of the not-too-distant past and with various tools, we can alert you as soon as homes hit the market, and sometimes before!
Here in Austin, Texas we are outpacing the economics of the country. Capitalize on these factors now and call me about buying or selling your home today!
Two articles of interest:
– Scott Lawrence, Realtor