If interest rates go up by 1%, your home value will go down 10%
Here is a quick history lesson for you: in 2013, interest rates were at 4.5%. During 2008, the bottom of the market, interest rates were at 6%. Now, I don’t think that rates will skyrocket and drastically impact the economy in the next 12 months. However, I do think that 3.5% interest rate will look very different at this time next year.
If you are selling your home, you also need to consider how interest rates will affect your buyer. If interest rates go up, your potential buyer’s mortgage payment will go up. Not only that, they may not be able to afford your house if the 3.5% interest rate goes up. If you are looking to sell your property, I recommend selling when rates are low so that more people can afford your home and your home value will go up.
Finally, here in Northern Virginia, there are not many cash buyers in our market. Roughly 95% of people buying homes in our market use some kind of financing, so you need to consider interest rates and the value of your home when deciding whether or not to sell.
If you have any other questions about interest rates or selling your home in the current market, give me a call or send me an email. I would be happy to help you!