Interest Rates are going up lets talk about what that means for you. The housing market is always changing. So what does that mean for potential homebuyers? Should you wait until interest rates go down again? In this video, San Diego Realtoor Jeremy Mchone will discuss the current state of the housing market and offer some advice on whether or not now is the time to buy a home.

Interest rates are going up. Let's talk about what that means for you. You might have heard that interest rates are rising, and they are, and with that, a lot of people are expecting a shift in the market. But what does that mean? First off, let's point out that the most recent data that's come out for San Diego County doesn't actually show any kind of a shift in the market. It still shows very low inventory and home prices that are still increasing very quickly. But I can tell you just working in the market day-to-day, I'm expecting when the next set of data comes out for this month, to see a little bit of an increase in the days on market and a little bit of a decrease in the list-to-sales price ratio.

So people aren't going to be selling for quite as much over the list price as they have been. The reason why I'm expecting that is we're just seeing a little bit less buyer activity on each listing right now. Does that mean that prices are going to drop? Not necessarily. If you're putting your home on the market and you're getting 10 offers on it and there's a shift in the market to where now you put your home on the market and you're getting five offers, well, you're still getting multiple offers, and those multiple offers are still going to push the price up. It's just going to be not quite as crazy. You may not have 10 to 20 people banging down your door as soon as you put your home on the market, but that's okay. The market's just starting to normalize a little bit, which is actually probably a good thing.

But what it does mean is if you're thinking about selling your home, you're probably going to have to be a lot more strategic than you had to be if you were selling the last couple years. You're probably not going to be able to look at what sold in the neighborhood, add 10% to it, put your home on the market for that price and then still get offers. That also means that you're going to have to be strategic about marketing as well and who you choose to hire to help you sell your home. Marketing and negotiation's going to be a lot more important now than it has been over the last couple years because the market's been so crazy. Now, if you're thinking about buying a home, it means that you're probably going to have a little bit less competition. You're probably going to have less people offering on that home and that's because it's getting more expensive to buy that home as rates start to come up. Now, does that mean that with rates increasing and getting more expensive, you shouldn't buy a home? No. I still think it makes sense to buy a home especially compared to renting. For one, if you buy a home right now, you're locking in that payment and it's going to be the same.

If you're renting, you're probably going to see that go up over time. And if rates continue to rise, like we expect them to, and you lock in a rate right now, say around 5%, that may sound high, but in the next year or so, when you're looking at a six or a 7% rate, you're going to be really happy you locked that in. And if I'm wrong and rates drop in the next year or two, you can refinance, lower your payment, and you'll probably see a bump in equity when those rates drop. Let's say a worst case scenario happens and the rates start to rise so high that it actually starts to push prices down. I still think you're going to be happy that you bought now because if that happens, that means that rates got so high that it became so unaffordable to buy a house that you probably were going to get priced out anyway. So at least now you own a home. Not only that, if that happens, all that means is that you just don't want to sell right away.

Wait a couple years until prices come back up, then you're going to still be in a strong position. And if you look at the history of home prices in America, I would challenge you to find a 10-year period where home prices actually dropped, which means that if you buy a home right now, even if there is a small market correction or prices go down, over a long enough timeline, you can still expect those prices to go up. And let's say worst case scenario, they don't. If you live there for 30 years, you pay off that loan, now all you're paying is property tax as opposed to renting where you're still going to be spending more than that over the long-term. Now, if you're thinking about buying or selling a home and you want to see how interest rates might be affecting you or how the market shift would change things for you, drop a comment below or just DM me.

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