As mortgage rates began to rise this year, many homeowners began to wonder if their homes' values would fall. The good news is... Historically, when mortgage rates increase by at least one percentage point, home prices continue to rise. The most recent home price data appears to confirm this trend.

According to Flexmls data, home price appreciation has accelerated again since January. This increase in home value appreciation is depicted in grey on the graph below:

This is largely due to an ongoing supply-demand imbalance. Specifically, housing supply remains low, while demand remains high. As mortgage rates began to rise this year, many homebuyers rushed to complete their transactions before rates increased further. The increased competition pushed up home prices even further. Deputy Chief Economist at CoreLogic, Selma Hepp, explains:

“Home price growth continued to gain speed in early spring, as eager buyers tried to get in front of the mortgage rate surge.”

And experts say prices are forecast to continue appreciating, just at a more moderate pace moving forward. A recent article from Fortune says:

“. . . the swift move up in mortgage rates . . . doesn’t mean home prices are about to crash. In fact, every major real estate firm with a publicly released forecast model . . . still predicts home prices will climb further this year.”

What This Means for You

If you’re thinking about selling your house, you should know that you have an excellent opportunity to capitalize on the current home price appreciation. As prices rise, so does the value of your home, which gives your equity a big boost.

When you sell, you can use that equity toward the purchase of your next home. And at today’s record-level of appreciation, that equity may be enough to cover some (if not all) of your down payment.

Bottom Line

History shows rising mortgage rates have not had a negative impact on home prices. Now is still a great time to sell your house thanks to ongoing price appreciation. When you’re ready to find out how much equity you have in your current home and what’s happening with home prices in your local area, let’s connect.