What to Consider When Selling Your Home in a Rising Rate Environment

There are many economic variables to consider when selling your home when interest rates are rising. If that’s the only changing economic variable, you’re generally going to see a negative impact on both home sales and home prices. This means as interest rates rise, the buyer pool for your home is going to shrink.

In 2008, the Federal Reserve set rates at 0.25 percent because of the recession and the lack of buyer confidence or demand. Since then, buyer confidence and buyer demand have risen. In December 2015, rates climbed to 0.5 percent and continued to rise to where they are today at 1.5 percent. The Fed has noted rates will rise to 2 percent in 2018 and then 3 percent by 2020.

What Happens to the Ability to Sell Your Home With These Rises in Interest Rates?
If interest rates rise 1 percent and all other economic factors remain the same, purchasing power for homebuyers will decrease by just over 11 percent; therefore, every quarter-percent (0.25 percent) rise of interest rates reduces homebuyer purchasing power by 3 percent.

That means for a home purchase of $300,000, a 1 percent interest rate rise reduces buying power to just under $267,000. So, someone who potentially may have been able to purchase your home may no longer have the buying power to do so. This creates a smaller buyer pool and less demand for your home. It’s also likely to increase supply as fewer people are able to purchase homes.

If mortgage rates rise, it becomes more probable for indecisive buyers to rush into the market, and the short term will likely see a decent boost; however, it could add extra pressure if rates continue to rise without leveling out.

While interest rates play a role in the housing market, there are a variety of personal and economic factors to consider, as well.

What Other Economic Factors Play a Role?
Supply and demand play crucial roles in determining the movement of home prices. If supply goes up, home prices go down. If supply goes down, home prices will probably go up. If demand increases, home prices mostly likely will as well; however, if fewer people are looking to buy homes, then prices will most likely decrease. As a seller, these are important factors to consider when putting your home on the market.

The sale of new homes is another factor to consider alongside rising interest rates because supply and demand will always play a factor in the home-buying process. Supply increases when new homes are created. Assuming that interest rates don’t rise too rapidly, paying attention to new-home inventory levels will give you an indication of what to expect as a seller.

Monthly income, as it relates to monthly mortgage payments, is a more important variable to gauge than interest rates alone. Your debt-to-income ratio plays a larger factor in your ability to qualify for a mortgage than interest rates alone. When monthly income rises, your ability to absorb higher interest rates does, as well. This means that as long as people are making more money, they’ll also be able to pay off any increase in debts.

When the real estate market crashed in 2007-2008, monthly payments of principal and interest were nearing 25 percent of the U.S. median family monthly income. Even with a rise in interest rates, Americans are currently seeing the highest monthly median income in the last 35 years. Because of this, the percentage of monthly income going toward monthly payments is still well below levels that analysts consider dangerous.

Overall, we seem much more hesitant to take out mortgages than we have been in the past.

One of the largest surprises is the percentage of all-cash transactions for home purchases. Even with interest rates at historic lows, the percentage of all-cash transactions is higher than normal because we’re more cautious about taking on debt than we have been in recent decades.

High stock market valuations allow people to diversify their percentage of assets, cash out and reinvest in real estate to keep their portfolio balanced.

The number of distressed properties is a result of a strong job environment. This allows folks to pay their mortgages without defaulting, while also helping to keep prices up even with a rise in interest rates.

While interest rates play a large factor in selling your home for top dollar, they’re in no way the only deciding factor. All of the factors mentioned above should be taken into consideration before you rush into selling your home because of high interest rates.

Ryan Fitzgerald is the founder of Raleigh Realty, a local real estate firm in Raleigh, N.C., that specializes in helping people find great homes for sale online.

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$195,000 :: 3630 CHICAGO, WARREN MI, 48092

Property Photo

3 beds, 2 baths
Home size: 1,800 sq ft
Lot Size: 24,393 sq ft
Added: 10/07/17, Last Updated: 03/12/18
Property Type: Single Family
MLS Number: 58031332726
Community: Warren
Status: Sold

Rare Opportunity to own this original owner sprawling ranch on over a half acre tree-lined lot! Furnace was just re-conditioned including new pump! Custom home features: Living Rm w/ natural fireplace, Formal dining room in addition to eating space in the NEW Gourmet Kitchen w/ Dark wood Cabinets, Granite Countertops, sharp flooring, & Appliances negotiable!! Nice size bedrooms with hardwood floors & full bathroom with large vanity & additional granite counter space! New Insulation in attic. Large open family room off rear of home w/ doorwall leading to patio & fountain that overlook the beautiful extra-deep treed-lot! Large custom shed in yard with garage door on rear! The homes interior expands with the finished basement that includes: Full bath w/ stand-up shower, Workshop area, Wet Bar, Finished room w/ doorwall that used to host hot tub, plenty of storage & closet space, & stairway off laundry area that leads outside to backyard! One Year Home Warranty Included!

Listed with Real Living Kee Realty-Clinton Twp

Brought to you by Janet Hull and Thomas Bush, Real Estate One, Inc.. Call me today at 1-855-Janet-Tom, or visit my website at www.JanetandThomas.com!

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5 Great Cities for Millennial Homebuyers

(TNS)—For millennials who are ready to become homeowners, finding an affordable house in a great community can be challenging. With housing inventory historically low, real estate in major metro areas is at a premium. It’s no surprise, then, that young buyers are moving to the suburbs, according to the 2017 Home Buyer and Seller Generational Trends Report by the National Association of REALTORS®.

Among millennials surveyed, 57 percent bought a house in the suburbs, spending an average of $205,000. Meanwhile, only 12 percent bought in an urban or central city. Affordability, convenience to work and neighborhood quality were among the top requirements for these buyers.

Using this information, we identified five cities that offer some combination of affordable housing, economic growth, job opportunities, proximity to major metro areas and recreational activities.

Great cities for millennial homebuyers:

  • Lancaster, Pa.
  • Columbus, Ohio
  • Garner, N.C.
  • St. Petersburg, Fla.
  • West Des Moines, Iowa.

Lancaster, Pa.
Population: 59,218
Median value of housing: $109,300

One of the oldest inland cities in the country, Lancaster boasts unique features, such as the country’s oldest continuously running farmers market. It’s also home to an established arts community and a network of independently owned businesses.

There are a number of homes available in Lancaster, including new construction. There were 200 new housing units built in Lancaster in 2017. This year, the city is on track to add 125 more, according to Marshall Snively, president of Lancaster City Alliance.

“In the last 10 years, we’ve had more than $1.5 billion in public and private investment, including residential development, and more is on the table,” Snively says.

Nestled between Harrisburg and Philadelphia, Lancaster is a good option for people who want to work in one of these larger cities but own in a more affordable location. Residents can take a train to Harrisburg in less than 35 minutes, and trains into New York City take about two-and-a-half hours.

Local businesses abound, so many residents don’t have to look beyond the city for jobs. Medical center Lancaster General Health has a network of 300 physicians and more than 3,600 employees. Fulton Bank, one of the region’s most prominent financial institutions, is headquartered in Lancaster.

The city has a strong arts culture, which supports a variety of vintage and antique stores, as well as outdoor markets and performing arts. Gallery Row downtown consists of three blocks of galleries, restaurants and retail.

Columbus, Ohio
Population: 860,090
Median value of housing: $131,800

You can own a home in Columbus without breaking the bank. Even in some of the more expensive neighborhoods, like Harrison West, you can find three-bedroom, two-bath homes for under $250,000.

Columbus supports many industries, including healthcare, education, finance, manufacturing, retail and technology. Columbus’ largest employer, the Ohio State University, has more than 30,000 full-time workers. Nationwide Insurance is also headquartered here, with about 13,000 full-time employees.

Columbus offers amenities for just about everyone. Kayakers can enjoy Columbus’ waterways, like Big Darby Creek, Griggs Reservoir and the Scioto River. There are also miles of bike trails and thousands of acres of parkland to hike.

Nightlife includes comedy clubs and live music venues, as well as hundreds of restaurants. Additionally, there are many large-scale attractions, like the Center of Science and Industry as well as the Columbus Zoo and Aquarium.

Garner, N.C.
Population: 28,776
Median value of housing: $164,800

This small town is about six miles south of Raleigh and is also near the Research Triangle, which includes Duke University, North Carolina State University and the University of North Carolina at Chapel Hill.

For people who work in any of these areas, Garner offers more affordable housing than some of the other nearby communities.

Garner’s business landscape is a mixture of information, utilities, retail and public administration. Companies like Butterball and Direct Distributors are headquartered in Garner. The median household income in Garner is $59,812, above the national median of $57,617, according to Census data.

Outdoor enthusiasts will appreciate Garner’s 1,200 acres of parkland and open space. White Deer Park offers bikers, runners and walkers two miles of paved trails, playgrounds, an arboretum and a 2,500-square-foot nature center.

Garner also has a mix of chain stores, shopping plazas and locally owned businesses. Local watering holes, like The Beerded Lady, offer a place for residents to see live music.

St. Petersburg, Fla.
Population: 260,999
Median value of housing: $154,800

St. Petersburg has rejuvenated its downtown, which is home to a mixture of business offices, residential property, restaurants and entertainment.

The Gulf Coast city boasts more than a dozen companies that employ over 1,000 people, including HSN, Raymond James Financial and Jabil Circuit, in addition to many other mid- and small-sized companies.

Mayor Rick Kriseman, who was just recently awarded the 2018 Small Business Advocate award by the U.S. Conference of Mayors for his commitment to small businesses, said that creating opportunities for young people is a top priority for St. Petersburg. The city’s Grow Smarter initiative developed by the city and the Chamber of Commerce to assess, develop and create programs to grow the local economy is an example of that focus.

“We are working hard to ensure we are an inclusive and welcoming city where people of all ages can grow and thrive,” Kriseman says. “We are specifically aiming to bolster and support our population of young professionals, as their skills and interest align well with our Grow Smarter economic development strategy.”

St. Petersburg is home to world-class museums, such as the Salvador Dali Museum and the Fine Arts Museum, as well as chefs honored with James Beard awards, including Lauren Macellaro of The Reading Room.

The city hosts events like the Firestone Grand Prix and is home to the Tampa Bay Rays baseball team.

West Des Moines, Iowa
Population: 64,560
Median value of housing: $195,500

West Des Moines borders Des Moines to the west, about eight miles from Des Moines International Airport. This small city reaps the benefits of the booming financial and publishing industries in Des Moines while retaining a grass-roots community.

“What we’re seeing is that a lot of young people are buying in our older neighborhoods,” says Clyde Evans, director of Economic Development for West Des Moines. “They’re fixing up houses from the ’60s, ’70s and ’80s. It’s affordable for them to do that here.”

Finance and insurance companies, including Wells Fargo, Farm Bureau and Athene, are located in West Des Moines. Small businesses also make up a large part of West Des Moines’ economy, adding to the 2,800 businesses in the city, according to the West Des Moines Chamber of Commerce. West Des Moines is only 11 miles east of Waukee, the future home of Apple’s $1.375 billion data center announced last year.

West Des Moines has a variety of restaurants and shopping destinations, including Jordan Creek Town Center and Valley West Mall. There are also microbreweries for beer connoisseurs, like locally owned Twisted Vine.

The 632-acre Raccoon River State Park offers an array of activities like fishing, boating and even swimming along the 500-foot beach, which is part of Blue Heron Lake. There’s also an extensive network of almost 50 miles of greenway trails, park trails and side paths.

©2018 Bankrate.com
Distributed by Tribune Content Agency, LLC

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$112,500 :: 11508 IRVINGTON, Warren MI, 48093

3 beds, 2 baths
Home size: 1,462 sq ft
Lot Size: 0 sq ft
Added: 03/09/18, Last Updated: 03/09/18
Property Type: Single Family
MLS Number: 430880
Community: Warren (50023)
Status: Sold

Listed with Schultes Real Estate Co., Inc.

Brought to you by Janet Hull and Thomas Bush, Real Estate One, Inc.. Call me today at 1-855-Janet-Tom, or visit my website at www.JanetandThomas.com!

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$121,000 :: 26429 EUREKA DR, Warren MI, 48091

Property Photo

3 beds, 2 baths
Home size: 1,113 sq ft
Lot Size: 7,405 sq ft
Added: 02/16/18, Last Updated: 03/09/18
Property Type: Single Family
MLS Number: 21414936
Community: Warren (50023)
Status: Sold


Listed with Century 21 Curran & Christie

Brought to you by Janet Hull and Thomas Bush, Real Estate One, Inc.. Call me today at 1-855-Janet-Tom, or visit my website at www.JanetandThomas.com!

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$255,900 :: 32482 Pine Ridge Dr, Warren MI, 48093

Property Photo

3 beds, 3 baths
Home size: 2,069 sq ft
Lot Size: 0 sq ft
Added: 10/28/17, Last Updated: 03/08/18
Property Type: Single Family
MLS Number: 31334256
Community: Warren (50023)
Tract: Pine Ridge Estates
The price of this listing was last reduced on 1/17/2018 by 2%
Status: Sold

Beautiful split level home located in the prime area of northern Warren located in the award winning Warren consolidated School System! Featuring 3 bedrooms, a den and 2 1/2 bathrooms, this home is sure to please even the pickiest of buyers. Additional features include: 2 year old roof, basement sealed and waterproofed, central vacuum and much more! The park like backyard is perfect for entertaining and includes a beautiful deck and large open yard with no backyard neighbors and is complete with gas line running directly to the BBQ. All appliances included.

Listed with Century 21 AAA North-Macomb

Brought to you by Janet Hull and Thomas Bush, Real Estate One, Inc.. Call me today at 1-855-Janet-Tom, or visit my website at www.JanetandThomas.com!

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Tampa is the Best Market for First-time Homebuyers

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$89,000 :: 13319 COUWLIER ST S, Warren MI, 48089

4 beds, 1 bath
Home size: 1,061 sq ft
Lot Size: 8,276 sq ft
Added: 03/06/18, Last Updated: 03/06/18
Property Type: Single Family
MLS Number: 21420060
Community: Warren (50023)
Status: Active

Move in Ready, Completely renovated 4 bed room ranch freshly painted, With new hardwood floors in living room and hallway, New carpet in bed rooms, Kitchen and Bath has new cabinets and granite counter tops finished basement with a possible 5th bed room, Updated electrical system, furnace 2 years old and newer hot water tank, You must see this home for yourself, also comes with a appliance package.Selling entity is a licensed realtor

Listed with Temple Realty

Brought to you by Janet Hull and Thomas Bush, Real Estate One, Inc.. Call me today at 1-855-Janet-Tom, or visit my website at www.JanetandThomas.com!

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$45,000 :: 2160 GARRICK Avenue, Warren MI, 48091

Warren, MI Properties
Property Photo

4 beds, 1 bath
Home size: 1,100 sq ft
Lot Size: 11,325 sq ft
Added: 03/05/18, Last Updated: 03/05/18
Property Type: Single Family
MLS Number: 218017758
Community: Warren
Status: Sold


Listed with Keller Williams Realty-Great Lakes

Brought to you by Janet Hull and Thomas Bush, Real Estate One, Inc.. Call me today at 1-855-Janet-Tom, or visit my website at www.JanetandThomas.com!

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$67,000 :: 24665 Columbus, Warren MI, 48089

Warren, MI Properties
Property Photo

3 beds, 1 bath
Home size: 800 sq ft
Lot Size: 17,859 sq ft
Added: 03/05/18, Last Updated: 03/05/18
Property Type: Single Family
MLS Number: 31341334
Community: Warren (50023)
Tract: Nicolai Estates – Warren
Status: Pending

Updated and renovated home on a HUGE DOUBLE LOT! 3 bedroom home with NEW WINDOWS, ROOF ’15, Remodeled Kitchen with New Cabinets & Flooring! Freshly painted Interior & Refinished Hardwood Floors. Remodeled Bath. 2nd Shower in Basement with Newer Glass Block Windows. 2 Car Garage. 0.42 Acre PRIVACY FENCED LOT! WONT LAST LONG!!!

Listed with Keller Williams Realty Lakeside

Brought to you by Janet Hull and Thomas Bush, Real Estate One, Inc.. Call me today at 1-855-Janet-Tom, or visit my website at www.JanetandThomas.com!

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