As interest rates continue to rise to historic 13-year highs, the Tri-Cities real estate market is still going strong. For the first time in months, the inventory of available homes actually increased to 1.04 months, up from 0.9 in March. While this may not seem like much, it’s one of several signs that the housing market is starting to slow. Homes did close a week faster than in March, which to many in the industry signals that lenders, appraisers, and title companies aren’t as backed up with closings as they have been over the past few years. However, only time will tell if this is true. There were 790 closings last month, which was down 6.5% from last year. The prices of homes continue to entice sellers, but also frustrate buyers. The continued increase in prices, coupled with 5% or higher interest rates, has led to decreased buying power for potential homeowners. In fact, for every 1% increase in interest rates, buying power decreases by 10-12%. As an example, the average home price in the Tri-Cities in April was $263,098. Assuming a 2% change in interest rates (from the average of 3% in 2021), that means the average homebuyer in the Tri-Cities lost at least $52,619.60 in buying power.
Curious about how the current real estate market could impact your ability to buy or sell? Contact us today for a free, no-hassle consultation.