Many Beacon Hill condo clients of ours have commented on the recent rise in interest rates over the last couple of weeks. This upward movement marks the first significant rate increase in years, and many experts say that it represents a strengthening housing market. But don’t let the increase fool you, interest rates are still at a historical low and offer home owners a great opportunity to lock in low payments on their homes.
Interest rate impact
What this rate increase will do though is knock some Boston Beacon Hill condo buyers, that may have been on the fence about becoming homeowners, out of the “buyer pool”. A rise in interest rates will also make some current homeowners think twice about buying a second property for an investment home or rental property. This decrease in buyer competition will certainly have an impact on the average Boston condo for sale “time on market.” For the past 6 months to 1 year, the Downtown Boston Real Estate market has been experiencing a strong “sellers market” and one of the key indicators to that market was the very low Boston condo for sale “market time.” Many times, sellers would list their homes and have multiple offers within the first week. With less buyers in the buyer pool, we now anticipate that trend to slow down.
Now don’t get me wrong. While the interest rates did increase, and it will have a small affect on the Downtown Boston condos for sale market, they are still relatively low in comparison to all time averages. The actual increase in a typical $400,000 home loan payment is about $115 each month. So while those amazing, dub-4.0% rates may be gone, the rate increase should not take you out of the market completely.
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