The Louisville real estate market has been making some recent changes along with other industries due to rising interest rates, some of the ways the real estate market is changing is by making homes less afforable to buy, taking longer to sell your property now and not getting as much money for it or not as many potential buyers looking at your property.
Days on market have gone up in Louisville for properties along with the available number of listings. The prices have not dropped to bad which is good and historically Louisville does not dip down as far as other cities during recessions so that is a plus but regardless of that people can not afford as much as they were able to previously because of higher interest rates in Louisville.
Who Decides What Interest Rates Are?
Interest rates are set by the Federal Reserve and affect the cost of borrowing money. When interest rates go up, it means that lenders will charge higher interest on loans to make a profit, making it more difficult for buyers to purchase large items such as cars or homes.
It is clear that rising interest rates can have a profound effect on the real estate market in general. Homeowners and buyers need to be aware of this trend, so they can make informed decisions when entering or exiting the market. With careful planning and strategy, buyers and sellers can still take advantage of opportunities in the real estate market despite the current trends and find amazing deals!
Higher Rates Make Homes Less Affordable!
Buying a home is an exciting adventure, but it’s important to plan ahead! Interest rates are always fluctuating, so when they rise your monthly payments may be higher than initially expected. This means your payment would be higher today than a year ago when looking for a mortgage which means the total amount you would be able to qualify for a home in Louisville would be less. So when interest rates are low, you will be able to get a more expensive house or buying power than if your interest rates were higher.
If you or a buyer is looking to purchase a house, the difference between buying one now and buying one a year ago could mean hundreds of thousands of dollars! A 30-year mortgage at 3% fixed rate a year or so ago would amount to $1,264.81 per month – but if you got a mortgage now at 6.5%, then you’d be paying an extra $631.39 each month for the same loan – that adds up over time; in fact it can equate to as much as an additional $227K in interest paid out if you make the monthly payments for the entire 30 years.
If you are trying to figure out how much your monthly payment would be if you were to go house hunting then use this fixed interest rate calculator on Mortgagecalculator.org . If you are considering an amortized loan then here is a amortization calculator we use from Bankrate.
Check the current interest rates here!
Increased Days On Market In Louisville
With rising interest rates, the average days on market for properties in Louisville have also increased. This means that it takes longer for owners to sell their property and can mean additional costs associated with holding onto an asset. As a result, homeowners should factor these changes into their budget and timing when considering selling their home or investing in investment properties.
The trend of increased days on market is also likely to continue, so prospective buyers and sellers in Louisville need to be aware of the current market conditions. For buyers, this means planning to ensure that they have enough time available when searching for a property. As for sellers, it means being more strategic with pricing, the size of renovations for the house and the price range you are buying or selling in.
Not Getting As Much Money For Your Home In Louisville Or As Many Buyers
The rising interest rates also mean that sellers in Louisville are not getting as much money for their homes. This means that the amount of money buyers can pay for the property is decreasing because the monthly mortgage is higher, making it more difficult to make a profit from a sale and decreasing what you take home at the end of the day.
In addition to this, buyers are finding it harder to secure a loan due to the rising interest rates. As a result, there are fewer buyers in the market and those that do exist can often be less willing to pay higher prices due to the increased cost of borrowing money and increased availability so the buyers can be pickier in the properties they choose to buy
On The Bright Side Of The Louisville Real Estate Market
On the bright side, a recent blog post made by “Realtor.com” on the top 10 real estate markets shows that Louisville is ranked #3 on markets to grow in 2023 which gives real estate professionals a lot to look forward to. Despite the current market conditions, there is still growth potential, and this could be an opportunity for buyers and sellers alike to take advantage of the market.
The real estate market is changing in Louisville , and the professional buyers at Louisville Cash Real Estate are ready to help you navigate the ever-evolving real estate market while saving you time, energy, and money. Fill out our form for a no obligation offer on your Louisville home to see how much money you can get.