Hi, I’m Lisa Garrett with the May edition of the Quad City Homes Market Report. So, what *is* interest rate lock? I’ll get to that, but first, here’s the good news. Local inventory is growing!
April saw a rise in inventory over the prior month of 14%. There were upticks even in the most popular price points under $325,000. And overall, inventory grew from 2.3 to 2.7 months. We’re still well below an average market that has 5 to 6 months of inventory, but it’s heartening to see movement towards balance.
Now to the Question of the Day... look at how interest rates have moved up rather dramatically this year, by more than half-a-point, and if we go all the way back to the previous year... we’re much higher.
So, Rate Lock is a concern, especially for folks who own a home now and are thinking about moving up. They expect to pay more money for their next home, but if they have a 3... 3.5% mortgage, that next mortgage payment is going to be dramatically higher. There will come a point that they *lock in*. They’re going to say, “Nope, I can’t sell this house because my mortgage rate is too good.”
And we’re already starting to see a little data on that point. Here’s a percentage of all homes in each rate bracket currently for sale. It shows that less than 1 percent of homes with under a 3% mortgage are on the market. Rate Lock. So, it’s important that if you currently own a home and are thinking about making a move, to consider doing so now while interest rates are still historically low. When they return to normal levels at six... six-and-half-percent... that’s going to be a big difference in your mortgage payment.
Got questions? You can always give us a call and we’ll be happy to help you evaluate your options in this dynamic market. And don’t forget to ask about our new free Virtual Reality House Hunting! I’m Lisa Garrett, market strategist, at your service.