House Values Resilient Despite Interest Rates
Filed under: Mortgage News
Today I’m pulling up a chart that we put out every month. It’s one of my favorites to show housing trends.
The red line on the chart is 21 years of 4.5% year-over-year growth. Looking at historical norms, it’s about what you can expect. The blue line represents what is really happening in the industry. We found these numbers by picking the average-sized home for the region (about 2150 square feet), then looked at what is happening for prices for that type of home.
$658,808 is the average home price in our area right now. The median home price is actually a bit higher, but we believe that this average home price is more indicative of what is really happening in the area.
We Are Right on Track
You can see we are currently tracking right along the 4.5% growth. I know there is a lot of talk about prices being way too high and things need to come down at some point. Historically, there are plenty of examples of prices coming down way under the red line. But when you look at the dynamics back then vs. where we are now, it’s a totally different story.
I love to point this out, especially because it shows sanity in terms of where prices are at right now. Despite the fact that rates have been increasing over the past 18 months, housing prices are continuing to stay resilient. We are one-half of one percent off of pricing compared to where we were last year. Nationally, things are actually a bit higher again.
Are You Waiting for a Crash That Isn’t Coming?
What’s the big deal and why do I keep bringing this up? I think a lot of people are waiting for a crash that just isn’t coming. Despite what some of the news headlines are saying, there aren’t any real estate experts that are predicting an upcoming crash for residential housing.
Of course, commercial real estate could take a hit. And who knows, anything could happen! But I think that we are in a strong position and it is a reasonable time to buy. If you can make it happen, then reach out to our team at Franklin Loan Center to learn more about financing options. If you have questions or need mortgage assistance, give me a call or shoot me a message. Bill Provost, Franklin Loan Center in Temecula, (425) 241-1922 or bill@homeloanpartner.com.
