Could It Be Time To Sell Your House?
If you have been thinking of selling your house, we may be approaching the top of the market.
Raising bond yields will result in higher home mortgage rates, which have increased by about a half a point in recent days. In my opinion, this affects the value of your home, because many buyers look at the payment of a loan as it relates to the cost of a home. My neighbors just sold their two bedroom two bath house for $750,000.00. When they bought the effective residential lending rate was about 3.85%. This results in a payment for this dual earner household of $2,800.00 – not bad in this market.
Rates today are 4.1% which makes it a $2,900.00 payment, also not bad. What happens when they increase to say 7%? In the last thirty years rates have dropped from 12.5% to where they were last week. I would consider a rate for 7% average not speculative. The payment goes from $2,900.00 to $4,000.00 for the same house. You know that prices are going to give, not incomes. So sell that house now. (I don’t sell houses).