COLORADO SPRINGS — Mortgage rates have gone up again. They are now at a 20 year high of just over seven percent.
“The market has never been static,” said Ed Behr a partner with The Platinum Group Realtors.
Behr has worked in the Colorado Springs Real Estate Market for nearly four decades. He offered some honest perspective on the pluses and minuses of rising interest rates.
He ran the numbers on what rising interest rates have done to monthly payments. The chart below shows interest rates at different key points in 2022. You then see how much the payment would be with a 30 year $500,000 loan.
2022. $500,000 Loan:
March. 3% $2,435
April 5.27% $3,062
September 6% $3,281
October. 7.15%. $3,641
From March to now the increase is close to $12 hundred.
“You factor in just the effects of inflation with how much you're paying for groceries, gas, utilities, everything in life right now, I think it's just making people pause, but it's certainly not a time to panic,” said Behr.
Other factors in the real estate market are showing changes caused by the rising interest rates.
“Right now, we're seeing average days on the market at about 27 days. And it's been increasing over the last three months as in really following the pattern of rates as rates have increased,” said Behr.
It is a significant change from earlier in the year when homes were selling within one or two days.
This is where Behr sees pluses for buyers. Bidding wars are now rare, which means they have time to better think about their decision. There are also some sellers now making price concessions to off-set the new higher interest rates. Buyers are now in a better position to ask sellers to fix issues found during inspections.
“It's just becoming more of a balanced market and a stable market and a more normal pace,” said Behr, “And if you think about it less than 30 days is still a good timeframe.”
Housing prices hikes have slowed dramatically.
They are no longer rising at the rapid rate of recent years. Behr doesn’t see major price drops in the near future. And even if sellers have to make some price concessions they are likely still financially ahead.
“Because of the rapid appreciation we've had over the last couple years, sellers are still making money. I mean, on the most part, so I think you have to put that in perspective. You may not make as much as you would have back in the spring when rates were 3%. But you're still in a good equity position.”
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