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Will Higher Rates Choke Off Housing Recovery? We Say “No”

Will increasing rates choke off the housing recovery? Probably not. This is important for leery new buyers to understand.

It is true that low rates improve the housing picture b/c they foster more affordability. But, the other factor that drives housing is the overall employment picture, and it has been steadily improving. This is particularly true in many parts of the Bay Area.

Further, increasing rates sometimes improves the employment pictures b/c higher rates can spur investors to pursue more sound investments that further improve employment.

Another factor to consider is the lack of inventory in many of the “hot markets.” There is simply no more room to build in most desirable areas.

We continue to encourage buyers to buy now in order to lock in rates that remain extremely low, despite recent increases. But, we also like to let buyers know that we do not think home values will come down as rates continue to increase.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 335646