Will home prices drop as interest rates rise?

We’ve all seen at least an article or two from national experts forecasting what to expect in home prices in this changing economy. Locally, there is no question that the real estate market is softening due to rising interest rates, high inflation, ongoing supply chain disruptions, and labor shortages.

These conditions have weakened housing demand and home price appreciation is slowing down.

The graph below provided by local economist, Paul Brewbaker, indicates how single-family home prices have fared over the years, including during recessions reflected by the shaded bars.

Historical data shows that home prices have continued to go up over time as interest rates fluctuate. In the current market, housing is starting to experience a normalizing phase from the COVID buying frenzy that took place over the last two years.

Curious to know how much your property value has changed in this market? Give me a call. I would be happy to give you a home valuation or send you a market report of activity in your neighborhood.