Concho Valley Housing Market Update

SAN ANGELO, Texas – The housing market is strong and appears to remain so despite the Federal Reserve raising short-term interest rates.

When the pandemic started, the government lowered interest rates on loans and started printing money so consumers could keep spending despite fear of COVID – it affected everything – including homes. ASU economics professor Bryan Cutsinger says, “It was very cheap to borrow money to buy a house. We tend to see house prices go up during periods of low interest rates.

With interest rates low, we have seen demand for homes begin to increase, giving sellers increased leverage over the asking price.

“They started printing money in 2020. And real estate values ​​in this city have skyrocketed during that time. So if you bought a house in 2019, you might have put $100,000 of equity in your pocket over the past two and a half years,” said Ryan Newlin of ERA Newlin and Company. “You may be paying more for your milk, your bread, your gasoline, everything else. But you went the other way on your real estate, so it went up in value a lot.

But since the Fed recently raised short-term interest rates, what does that mean now for players in the housing market?

Short-term interest rates affect 10-year Treasury bills which, in turn, affect mortgage rates. When the short-term interest rate increases, mortgages also increase. However, the outlook for the United States differs from that of the Concho Valley and San Angelo.

“What they’re doing federally with short-term rates doesn’t affect our long-term mortgage rates,” Newlin says.

With our interest rates rising, professionals say the market is starting to see demand cooling, which is stabilizing the imbalance.

“Now we’re entering a period where interest rates have risen, so buyers are slowing down a bit,” Newlin says.

About Teresa G. Wilson

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