Mortgage Minute: Rising Rates

Our team, along with Lender & RVP, Casey Granston at CrossCountry Mortgage, have been keeping a close eye on rising interest rates and thought it would be helpful to share our take with you:

We know the news is constantly reporting on rising interest rates and talking about housing bubbles, which can make you wonder about how this affects our local real estate market. Well, it can all sound bad, especially if you are in the know. Mortgage rates are at a 14-year high, the stock market is decreasing, we are on the verge of an equity recession, inflation is at the highest level in over 40 years, and gas is crazy expensive. In Seattle, there is still very little inventory and we've got about two years to go until we see a balanced market.

So, what's the silver lining? Homes in Seattle are still appreciating at fantastic rates; already 10% in 2022, and forecasts are projecting 8-10% in 2023 and 2024. While the mortgage rate may be higher now, we project rates to decrease in the next 18 months. If you wait until rates to come down to buy, that $1 million home will be worth $1.1 million in 2023. It may be better to buy it now and refinance when rates drop so you can start gaining equity now.

Adjustable rate mortgages (ARMs) are coming back, and they are definitely something to consider. The rate is locked in for a specific amount of time and at the end of the ARM period (generally 7 or 10 years), the interest rate adjusts. This is definitely something to look at and be aware of.

As always, if we can help answer any questions about this topic or real estate in general, please don't hesitate to reach out!