Will Increasing Mortgage Rates Impact Home Prices in San Diego, CA?There are some who are calling for a decrease in home prices should mortgage interest rates begin to rise rapidly. Intuitively,
Will Increasing Mortgage Rates Impact Home Prices in San Diego, CA?
Dated: September 22 2021
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Will Increasing Mortgage Rates Impact Home Prices in San Diego, CA?
There are some who are calling for a decrease in home prices should mortgage interest rates begin to rise rapidly. Intuitively, this makes sense as the cost of a home is determined by the price of the home, plus the cost of financing that home. If mortgage interest rates increase, fewer people will be able to buy, and logic says prices will fall if demand decreases.
However, history shows us that this has not been the case the last four times mortgage interest rates dramatically increased.
Here is a graph showing what actually happened:
In an article titled “Higher Rates Don’t Mean Lower House Prices After All,” the Wall Street Journal revealed that a recent study by John Burns Real Estate Consulting Inc. found that:
“[P]rices weren’t especially sensitive to rising rates, particularly in the presence of other positive economic factors, such as strong job growth, rising wages and improving consumer confidence.”
Jobs report was strong and the Conference Board just reported that the Consumer Confidence Index was back to pre-recession levels.
Bottom Line
We will have to wait and see what happens as we move forward, but a decrease in home prices should rates go up is anything but guaranteed. Call me at 858-774-1154.
Paul Abola
Paul Abola is a rare, highly-valued real estate agent. His successful background in residential architecture enables him to provide his clients with unique insights from both aesthetic and structural....
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Based on information from California Regional Multiple Listing Service, Inc. as of July 3, 2022 5:09 AM UTC This information is for your personal, non-commercial use and may not be used for any purpose other than to identify prospective properties you may be interested in purchasing. Display of MLS data is usually deemed reliable but is NOT guaranteed accurate by the MLS. Buyers are responsible for verifying the accuracy of all information and should investigate the data themselves or retain appropriate professionals. Information from sources other than the Listing Agent may have been included in the MLS data. Unless otherwise specified in writing, Broker/Agent has not and will not verify any information obtained from other sources. The Broker/Agent providing the information contained herein may or may not have been the Listing and/or Selling Agent.
Based on information from California Regional Multiple Listing Service, Inc. as of July 3, 2022 5:35 AM UTC This information is for your personal, non-commercial use and may not be used for any purpose other than to identify prospective properties you may be interested in purchasing. Display of MLS data is usually deemed reliable but is NOT guaranteed accurate by the MLS. Buyers are responsible for verifying the accuracy of all information and should investigate the data themselves or retain appropriate
