Interest rates driving housing in favor of buyers

Published: Feb. 15, 2023 at 3:36 PM EST
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BLACKSBURG, Va. (WDBJ) - Power in the housing market is starting to shift to buyers, according to Jonathan Everett, an Assistant Professor of Practice at Virginia Tech.

“I think anecdotally people could say, or at least I’ve sort of noticed that things might be staying on the market a little bit longer than they were a year ago,” he said. “You might even see potentially some more opportunities for negotiations.”

He says the market is still strong, but interest rates are the major driving factor to the slight cool-off in the market.

“If you look at the median house price, for last year, I’m using National Association of Realtors data here, which was just shy of $370,000; that’s over a $400 difference in terms of your monthly payment,” Everett said.

On top of of higher interest rates, Everett says there’s more than what meets the eye when it comes to the costs of owning a home.

“The interest rate might be fixed, but your payment can change based on differences or changes or increases, like what we’ve been saying, and taxes and insurance, are those other aspects of the overall mortgage payment,” he said.

If you’re looking to buy a home now, Everett says it’s important to calculate your affordability with the current interest rates.

“We can make predictions and estimations as far as where interest rates will head. I think homebuyers instead should ask themselves, ‘can I accomplish my personal and financial goals if I purchased the house today under the current environment?’” Everett said.