Rising mortgage rates won’t cool the housing market, but could impact buyer behavior
HONOLULU (HawaiiNewsNow) – Mortgage rates continue to rise, but that shouldn’t dampen Hawaii’s booming real estate market.
According to Freddie Mac, 30-year mortgage interest rates are now at 5.23%.
However, property experts and bankers do not believe this will lead to record price declines.
What it could do instead: change buyer behavior.
“The low rates we had during the pandemic for two years were unprecedented,” said Rusty Rasmussen, senior vice president of Central Pacific Bank’s home lending division.
“We thought it would increase more slowly. We knew it was coming, but not so fast.
A rapid rise: Especially considering that it was April when 30-year rates rose above 5% for the first time in a decade.
This comes as the median single-family home price in Hawaii stands at $1.15 million.
Despite the record numbers, demand remains and estate agents don’t expect potential buyers to leave.
Instead, they will reevaluate.
“The guy who was looking at an $850,000 purchase, at today’s rate just from January to today, is now looking at a $750,000 house, which may mean a different neighborhood, which may mean something smaller,” Honolulu Board of Realtors Chairman Chad Takesue said. .
And the numbers show that more and more people are cutting back on their purchases. Last month, single-family home sales fell 15%, but condo closings rose 15%.
For those wary of entering the housing market, banking and real estate insiders encourage long-term thinking for potential buyers.
“There are a number of other factors involved,” Rasmussen explained.
“They may be renting now and their rent is going to exceed this increased rate for mortgage payments, but you set your rate for 30 years and think long term. I think that’s a good way to look at it.
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