The rapid rise in interest rates over the last two months from a low of around 3.5 % to the current level at approximately 4.6% will have a somewhat dampening effect on rising home prices according to many economists.
The big question is how much? No one can know for sure, but we feel the effect will hardly be noticed unless interest rates rise to around the 6% level. At 4.6%, the rates are historically low, and homes are still quite affordable.
One other thing that we do not see many of the pundits mentioning is the CASH factor. Year to date in Incline Village, there have been more cash transactions than ever before. Cash buyers are much less influenced by fluctuations in interest rates.
The world is still awash in cash, and this is especially true in countries such as Korea and China who have been major beneficiaries of the huge trade imbalances we’ve been running in the U.S. for so many years.
Incline Village’s location and ideal climate is becoming more and more alluring to buyers.
Have a wonderful week.
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