Today the Fed is announcing whether or not they will raise interest rates. This affects us in the real estate business quite a bit and affects our clients even more. If interest rates go up from the 4% range into the 5% range, buyers will lose 10% of their purchasing power. In other words, a person who can afford to purchase a $250,000 home at a 4% interest rate can only afford a $225,000 home if interest rates go up to 5%.
My wife, Gina, and I sold our home this summer because I thought it was the right time to be selling. The environment is very friendly for selling right now. Values are up and interest rates are low. This means your home is worth more than it has been worth in 7-8 years AND low interest rates enable buyers to afford your home (at least for now). If interest rates go up, fewer buyers will be able to afford to buy your home and that, of course, will affect the home's value.
I'm happy to talk to you about this if you would like some clarification. Give me a call at 407-267-2312.
Matt Mobley the REALTOR®
The Hancock Real Estate Team
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