Here’s how interest rates and inflation are impacting Phoenix real estate.
Interest rates, inflation, and more. What the heck is going on with the Phoenix real estate market right now? I have the answer.
The Federal Reserve is obviously starting to get concerned about the inflation that’s all over the news. As a result, they’ve discussed slowing down or stopping bond purchases. Fewer bond purchases push interest rates up. This is used to control inflation, which is related to real estate as well. Home prices have been soaring over the last few years, which is a sign of high inflation.
A 1% increase in interest rates will decrease a buyer’s purchasing power by 10%. If you qualify for a $500,000 mortgage now, you’ll only qualify for a $450,000 mortgage if rates increase by just 1%. Buyers are scrambling to lock in low rates now before they go up. When you combine that with the fact that we have a shortage of homes available and people are continuing to move here from out of state, our market is extremely hot.
If you’re thinking of buying or selling a home in this market, give me a call at 602-738-9943 or send an email to firstname.lastname@example.org, and I’d love to help. If you have any other real estate-related questions, I’d be happy to answer those too. I look forward to hearing from you soon.