According to Freddie Mac, 30-year fixed-rate mortgages averaged above 5% in April for the first time in more than a decade.
SACRAMENTO, California – Home prices have continued to rise into the first quarter of 2022, but mortgage rates are rising fast.
The Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac, said 30-year fixed-rate mortgages averaged above 5% in April for the first time in more than a decade.
Traditionally, higher interest rates have heralded a buyer’s market, but house prices have continued to rise.
“If you want to sell, now is the right time. We are at the peak of the market. We don’t expect this to continue,” said Steven Bloom, manager at Realty One Group Complete.
Bloom said it’s still a hot seller’s market but he’s watching interest rates closely.
The Sacramento Appraisal Blog writes about an impending “temperature change” in the market. It shows that more offers are coming this month, although still not enough after about three weeks of supply.
The blog also notes that paying above list price has “softened,” although buyers are still paying more than 3% over asking price.
Buyers in this market should pre-qualify, Bloom said.
“Know exactly what you can afford at today’s interest rate and then look for houses that are a little below that,” Bloom said, warning that mortgage rates are likely to rise even further this year.
Time will tell if this will stem the rise in home prices, but buyers will certainly pay more interest.