How are interest rates affecting the real estate market?
The real estate market has made a 180 degree turn in the last 30 days. Interest rates for a 30-year fixed mortgage have increased from an average of 3% in March to an average of 5% in May. This sudden, yes sudden, increase in interest rates has impacted many buyers’ monthly payments greatly. An increase of 2% means an increase of $1,000 a month on a $1,000,000 purchase price and for a primary residence. Interest rates for an investment property have increased at the same rate which leaves many investors pumping the brakes on their purchases in anticipation of price decreases.