Will Increasing Mortgage Rates Impact Home and Ranch Land Prices?

Rapid Rise of Mortgage Rates

There has been some discussion recently on home prices in relation to mortgage rates. Some believe if there is a rapid rise of mortgage rates, home and espeacially ranch land prices should decrease. Logically it makes the most sense for the price of the house to drop when interest rates are rising, but this is not always the case. 

This theory of real estate prices decreasing is typically discussed by future home and land buyers. As a buyer you would like to think if you are paying higher rates on your mortgage, you should be able to see a decrease in cost somewhere else. Unfortunately, these rates are rising because the economy is in better shape. As the economy succeeds, incomes rise, rates go up, as well as the price of the ranch or home.

A recent study by the John Burns Real Estate Consulting found mortgage rates have very little impact on the cost of the property. The housing market and price increases are affected by things like job growth in the area and rising wages. Coincidentally, these same factors are causing the rise in the mortgage rates since people can afford to take out more.

Bottom line, it's NOT AS BAD as you hearing

As the economy progresses and strengthens, mortgage rates and home prices will fluctuate. It is a misconception as rates increase, home prices will decrease. Advances in the economy have shown that rates and home prices are more likely to increase together. 

Listen, we get it. Rates are up. But you know what? Prices are going down in many areas! If we believed everything we heard on the news, we’d be scared too! Have you heard that saying “date the rate?” If you find the property you love, let us help you get it! We can refinance later. We work with amazing lenders who are just as on top of their game as we are. Rates have certain times that they even dip. Let’s lock you in! 

We are here to help!

There are no silly questions. No wrong thing to ask. If you are looking to buy or sell, let Koehler Real Estate guide you through the process. The market is still moving. You just might need the right Realtor. Call us today at 210-422-1489! We are ready to help!