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February 2018 Greater Palm Springs Area Housing Market Report
Mortgage rates are on the rise. According the Freddie Mac deputy chief economist, weekly average 30-year fixed mortgage rate rose three basis points to 4.46 percent in this week’s survey, its highest level since January 2014. A 4.46 percent rate might not seem high to those with extensive real estate experience, but it is newly high for many potential first-time home buyers. Depending on the amount of the loan that you secure, a half of a percent (.5%) increase in interest rate can increase your monthly mortgage payment significantly.
According to data supplied by the MLS, the overall Median Sales Price in n the Greater Palm Spring Area was up 9.4 percent to $350,000. The property type with the largest price gain was the Condominium segment, where prices increased 10.0 percent to $259,000.
Market-wide, inventory levels were down 26.9 percent. The property type that lost the most inventory was the Condominium segment, where it decreased 38.5 percent. That amounts to 4.3 months supply for Condominiums.
Some homeowners may be less inclined to sell because they don’t want to lose their current record low rates that they secured after the recession. Some buyers, however, may want to move faster before rates rise even more and they face higher prices.
What impact will rising rates have on house values?
According to Rick Palacios Jr., Director of Research at John Burns Real Estate Consulting, mortgage rates have risen 1% or more ten times in the last 43 years, with little impact on home sales and prices when the economy was also strong. Historically, rising confidence, solid job growth, and higher wages have more than offset reduced demand for housing resulting from higher mortgage rates.
The last time mortgage rates increased by 1% over a twelve-month period was January 2013 (3.41%) to January 2014 (4.43%). What happened to house prices during that span? They appreciated by 9.8% nationally.
Every day, thousands of homeowners gain positive equity in their homes. If you’re wondering if you have enough equity to sell your house and move on to your dream home, contact us to discuss your options!
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