Housing Market: Homes in High Demand Despite Rising Mortgage Rates
January is typically one of the slowest months for residential real estate, as people mostly hunker down in their homes rather than try to leave for a new one.
But during Covid times, you can throw historical patterns out the window. This January is “shaping up to be the most competitive month in housing history,” the real estate company Redfin wrote.
How they back up their case:
- The median home sale price soared 16% annually in the week ending January 9, notching a new record of $365,000.
- In the past month, 41% of homes sold for above their listing price, up from 33% a year earlier.
Won’t rising interest rates cool down the market? Experts say that, yes, as the Fed moves to hike borrowing costs, the homebuying frenzy we saw in 2021 will slow. And mortgage rates are climbing—this week the average rate for a 30-year fixed-rate mortgage hit 3.45%, its highest level in nearly two years.
But in the near term, Redfin says, that’s only fueling more demand as potential buyers flood the market to lock in their loan before mortgage rates move even higher.