Rates just hit 5%. They haven’t been that high in many years.
It sounds like the sky is falling but it is not.
Many first time buyers are freaked out over this since they got used to lower rates.
When I bought my first house, I bragged to my friends that I was getting a 6.5% rate. I locked as soon as they fell from 6.625%. Most of my friends who had owned their houses for a few years had rates over 7%.
Several years later, I refinanced my third house when rates dropped to 5%. I could not believe at that time how low that rate seemed. I currently have a 3.375% rate on that house.
I’ve watched rates go up and down. The market change from a seller’s market to a buyer’s market to a seller’s market. If there is one thing I have learned is that the market keeps going. There are always first time buyers. There are always people getting transferred, married, divorced, retiring, and running out of space. Those things will always happen. The market is really about life and all the stages and events of it.
Something else I have noticed is that the market tends to pause when there is a big change, whether that change is interest rates, rising prices, dropping prices, etc. It’s like we say “Now isn’t a good time to do this because it is different that it was.” Then life happens, we get used to the “New” normal and we buy and/or sell.
We are in one of those times now. Mortgage applications are down slightly, sales are down slightly. We are entering what is believed to become a balanced market, meaning the number of buyers will be about the same as the number of sellers. This won’t last too long because like I said, people will get used to 5%. It will become the new normal. The market will go on just as life goes on.