Grapevine - Colleyville - Southlake | July 2022

2022 REAL ESTATE EDITION

MORTGAGE INTEREST RATES & RECESSIONS

20.0%

18% to 13%

17.5%

16% to 11.75%

15.0%

Interest rates historically tend to go up at the beginning of the recession and are then

12.5%

lowered to stimulate the economy. The result is a repeated increase in interest rates followed by a decrease. Here is a history of mortgage interest rates with the change in rates noted during each recession.

11% to 8.75%

6% to 4.875%

10.0%

7.5%

3.75% to 2.75%

5.0%

7.375% to 6.75%

Mortgage rate

2.5%

Shaded areas indicate periods of recession

0.0%

SOURCE: FREDDIE MACCOMMUNITY IMPACT NEWSPAPER

said, with more people looking to buy and sell while school is out. However, another major trend has homeowners selling their homes and moving into rentals, Assaad said. “I have a rental in Southlake—it’s $6,000 a month—and I’ve gotten mul- tiple oers on that because sellers are selling their house and wanting to just rent,” Assaad said. A lot of the reason has to do with the higher selling prices, she said. “People are wanting to take advan- tage of this market and cash out,” Assaad said. “They may be moving out of state and want to sell now while the market is hot … or they’re waiting until the interest rates go down next year or waiting for the right house to come on the market.” Runge said sellers are noticing how much interest rates have increased. “We’ll probably lose a few buyers along the way because interest rates are going to probably go up to 6%, maybe even a little higher, which might push some buyers out of the

least not in 2022,” Runge said. Minteer-Rosse said she anticipates that the demand in the region will always be high as more people move into the area. She said she predicts the real estate market will stay robust despite the relatively low inventory of homes, and the increased demand should eventually subside. “We’ve seen such high appreciation over the last year [to] year and a half, it still gives the sellers [the ability] to tap into the equity that they’ve seen,” Minteer-Rosse said. “But it’ll also give buyers a great opportunity to buy into the market, too, where they may have felt like they couldn’t compete in the past.” Joe New, vice president of produc- tion and a loan ocer with Cherry Creek Mortgage in Colleyville, said he expects increased mortgage interest rates for the time being. But looking back to the 1970s when ination was 13% and interest rates topped out at 18%, New said, “it wasn’t long after that where you saw

market,” Runge said. “So sellers are hearing that and wanting to go ahead and just capture the opportunity while they can.” However, Diaz said she would advise against renting a home while waiting for prices to go down, as no one can predict interest rates. “At least when you are a home- owner, you’re not paying rent somewhere else,” Diaz said. “But I understand people are looking at where we were last year, and they feel that interest [rates] are going up, and it is true. But we don’t know whether they’re going to continue going up or Every economic forecast meeting that Runge has attended indicates that the Grapevine, Colleyville and Southlake area is “still in a hot sell- er’s market,” she said. People are still paying more than what a house is appraising for, she said. “I don’t see it stopping anytime—at what’s going to happen.” The future of real estate

rates come down.” “Historically, after every storm, there’s some type of recovery,” New said. “I believe the future looks bright.” Similarly, Diaz said many are wor- ried that the real estate market is just as bad as it was in 2008 when the housing market crashed. The main dierence today is that more people have built up equity in their homes, she said. “So even if there were a slowdown, which no one can really predict, then people could just put their homes on the market and have a little less equity, but still get some money back versus waiting and going through what we had experienced in the past with short sales and foreclosures,” Diaz said. “So, to me, it seems that we are in a fabulous location for real estate ownership.”

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GRAPEVINE COLLEYVILLE SOUTHLAKE EDITION • JULY 2022