SACRAMENTO, Calif. — Home prices have continued to surge into the first quarter of 2022, but mortgage rates are climbing fast.
The Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac, announced that 30-year-fixed rate mortgages averaged higher than 5% in April for the first time in more than a decade.
Traditionally, higher interest rates have ushered in a buyer's market, but home prices have continued to go up.
"If you want to sell, now is the time. We are at the peak of the market. We don’t expect it to continue at the same rate," said Steven Bloom, a manager at Realty One Group Complete.
Bloom said it's still a hot seller's market, but he's watching the interest rates closely.
The Sacramento Appraisal Blog writes about an incoming "temperature change" in the market. It shows more listings are hitting the market this month, though still not enough at about three weeks of supply.
The blog also points out that paying above the list price has started to "soften," though buyers are still paying more than 3% above the asking price.
Buyers in this market should get pre-qualified, Bloom said.
"Know exactly what you can afford at today's interest rate, and then start looking at homes slightly under that," Bloom said, warning that mortgage rates are expected to rise even more this year.
Time will tell if that will stem the rise in home prices, but buyers will certainly be paying more in interest.
