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We're in for a very competitive stretch in the real estate market.
First off, mortgage rates have started increasing. For the first time since last summer, the 30-year average mortgage rate is now over 4%. This follows a long period when mortgage rates were near record lows.
And this latest increase might be more than just a temporary bump. Some experts, including Freddie Mac's deputy chief economist Len Kiefer, predict we've seen the last of sub-4% mortgage rates, thanks to strengthening inflation and broad-based economic growth.
Second, mortgage applications are also increasing. Applications were up in January by 4.1% compared to last year. This has been led by people looking to refinance their homes, while mortgage applications by homebuyers remained at steadier levels.
Third, housing supply continues to be increasingly tight, with 10% fewer homes on the market than a year ago.
So what do all of these numbers mean for you? The growth in mortgage rates shouldn't affect the number of eager homebuyers very much because there is so much more demand than supply right now.
However, this rise in mortgage rates might actually reduce the number of homes for sale even further.
The increase in mortgage applications for refinancing bears this out. Homeowners are looking to lock in the current, still fairly low mortgage rates. When mortgage rates increase further, homeowners will have less of an incentive to sell their current home and buy a new home, which will require a mortgage at a new, higher rate.
Does this mean you should worry about these new mortgage rates?
Not necessarily.
For example, if you're looking to buy, the biggest impact will still be the number of homes in the Rochester market.
Fortunately, a bunch of great homes have recently come on the market. You can see them all here:
Click here for all available Rochester homes for sale.
And if you're looking to sell, the current conditions make it very easy for you to do so at a top price.
To get an idea of what your home is worth in the current market, check out this home value calculator that takes into account recent Rochester sales:
Enter your street address here to find out what your home is worth.
Finally, if you want an even more accurate estimate, give me a call. I'm here to help.
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