Interest rates to rise in 2022. How do you think this will affect real estate? (clause, mortgage rates)
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As someone who plans to sell my house in spring of 2022, I’ve been paying attention to anything that might impact the housing market. Yesterday, it was announced that the Fed is going to raise interest rates three times in 2022. I have no idea when or by how much, I haven’t been able to find that information yet if it’s even been released. The best detail I can find is that they plan to raise at the first time in spring. But no date was given.
What do you think that this will mean for real estate in 2022? Will it heat things up more as people try to buy before the rates go up even more? Or will it slow things down?
My concern at the moment is I plan to sell my house in spring 2022. I was contemplating if I should sell my house a month or two early, and basically live in an extended stay hotel until my daughter finishes her senior year of high school. You know, one of those places that has two separate bedrooms and then a common living room/small kitchen/ and dining room area between the two rooms. But that can get very expensive. I calculated that my monthly housing costs when I include my mortgage, HOA fees, and utilities, (but not maintenance) runs me about $2600 a month. Staying in an extended stay hotel will cost $4500 a month.
I was also wondering if requesting rent back is reasonable in this market.
Anyway, I’m curious as to what you all might think about this. Thanks!
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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Like everything else related to home prices, it depends on the location. Here the demand is so high and the inventory so low that each is getting multiple offers over asking, and a majority go to the high bidder with cash. Where they get $1 million plus without a loan I don't know, but many are in management or tech at Amazon, Microsoft or Boeing, and may have managed to save for it on their $250k and up salaries. In areas without abundant high paying jobs, or in less desirable areas, higher interest rates may reduce prices some as less buyers will qualify for the loans.
It's NOT only about money (at least, it shouldn't be). It's about what makes your family; minimizing stress, making everyone's life livable and comfortable. (Like is your kid gonna invite friends to visit her in an extended stay here room?) Can your family really live happily in such close, crowded rooms? (I doubt it). What about noise, cars not being garaged, pets, cost of meals because of inadequate kitchens, etc etc etc
Staying in a hotel for months = more money and stress
Moving twice = more money, stress, and damage to your property.
If you value the mental health of your family, dump that idea immediately.
Can't say for sure that there will be 3 increases to the prime interest rate. Altho, I'm pretty sure Powell may be in the spotlight at least once or twice during 2022.
I think 1 increase for sure, and not even going to guess what the rate increase will be. We'll see how much COVID (and it's derivatives,) may effect the economy again during Winter and maybe the first part of Spring. This could have an influence on the rate changes. IF COVID causes the economy to retract again, like it did the first time, then we may see very little rate change in the short term.
Now, as far as selling your bargain for a more expensive alternative. That's up to you. Just remember, you're going from a house to a room. A hotel room.
Lastly, it's not unheard of to have a 60-180 day occupancy clause in your seller's contract. This has become quite popular during COVID especially. This is just another good reason, to have proper representation during a major transaction.
I don't think it's going to do much to markets with true underlying strength. Think of Raleigh, NC. It may help curb speculation in otherwise unexceptional markets.
As someone who plans to sell my house in spring of 2022, I’ve been paying attention to anything that might impact the housing market. Yesterday, it was announced that the Fed is going to raise interest rates three times in 2022. I have no idea when or by how much, I haven’t been able to find that information yet if it’s even been released. The best detail I can find is that they plan to raise at the first time in spring. But no date was given.
What do you think that this will mean for real estate in 2022? Will it heat things up more as people try to buy before the rates go up even more? Or will it slow things down?
My concern at the moment is I plan to sell my house in spring 2022. I was contemplating if I should sell my house a month or two early, and basically live in an extended stay hotel until my daughter finishes her senior year of high school. You know, one of those places that has two separate bedrooms and then a common living room/small kitchen/ and dining room area between the two rooms. But that can get very expensive. I calculated that my monthly housing costs when I include my mortgage, HOA fees, and utilities, (but not maintenance) runs me about $2600 a month. Staying in an extended stay hotel will cost $4500 a month.
I was also wondering if requesting rent back is reasonable in this market.
Anyway, I’m curious as to what you all might think about this. Thanks!
The Feds are talking about rates hitting just above 4 around September with the increases which is still an amazing interest rate. I would not live in an extended stay hotel for that.
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