A market shift… or crash?
There are a number of things contributing to the current market shift in real estate. Here are three key points:
1) It’s Minnesota. We tend to see a “fall slowdown” every year in September. We didn’t see it as strongly in 2020 due to the delayed demand from the pandemic but it’s back for 2021.
2) Coronavirus uncertainty. Yes, many people are uncertain about their job status, school status, health and the overall economy. This causes hesitation in some would-be buyers.
3) Rising Interest rates and high home prices. As prices go up, more people become priced out of homeownership. Add that to the uptick in mortgage interest rates and affordability reduces the buyer pool.
October 2021 continues the MN Housing Market Shift. What should you do now?
Mortgage rates peeked over the 3% threshold for the 30-year fixed-rate mortgage (FRM), marking 3.01% for the week ending Sept. 30.
“Early fall is usually the best time of year for to purchase a home, and with September housing inventory hitting 2021 highs, this season holds that typical promise. Home shoppers will want to think about rising rates when setting a budget. Smart buyers should consider calculating a monthly payment not only at today’s rates, but also at rates that are a bit higher so that they won’t be derailed by a sudden upward move,” said realtor.com® Chief Economist Danielle Hale in a statement. “Additionally, home shoppers want to carefully consider their must-haves versus nice-to-haves since both rising home prices and higher rates mean higher monthly payments. At today’s rate, the monthly mortgage payment on a median-priced home for-sale is roughly $150 higher than it was a year ago with $25 of the increase owed to higher rates and $125 owed to higher home prices.”
If interest rates continue to rise, that will put downward pressure on home prices. If the sale price of your home is the MOST important part of selling, seek council from and experienced, educated real estate agent ASAP. Nobody has a crystal ball and even some of the most reputable economists have be upended with all the the coronavirus and election turns but a skilled agent is in the depths of the market every day. They can analyze numbers with you and help you make the appropriate marketing plan, advise on the most important repairs, work through a timeline and position you to achieve the highest price in this changing market.
Don’t let the changing market scare you. Let it encourage you to take action and determine the best next move for you.