Posted On: December 29th, 2021 6:34PM
Will rising interest rates make less competition to buy a house next year?
In today’s blog, let’s break this down for the Denver Metro area.
The Mortgage Banker’s Association predicts that the 30 year fixed mortgage which is currently averaging 3.1% will rise to 4% by the end of 2022 and in turn push the median price of homes down. Fannie Mae predicts that rates will only go up to about 3.3% and values will continue to rise another 7% or so through 2022. Nobody is expecting rates to go down, so no matter how long you wait into 2022 the interest rate will be higher than it is today.
The idea is that as rates rise, affordability goes down which means less people qualify for loans, making less competition for Buyers. Nationwide and in some markets this may have some truth to it- however, In the Denver Metro area as of last month we only had 2 weeks of inventory. The be considered a fair or balanced market this needs to go higher than 6 months.
With the demand we are still seeing, even a moderate rate increase isn’t going to turn us into a Buyer’s market any time soon.
My advice for anyone considering purchasing in 2022:
As with everything Real Estate, there is no crystal ball where we can predict everything ~ but if you’ve been on the fence about buying I hope some of this information helps- and as always I’m always available for a chat!