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Low Mortgage Rates and Other Perks Keep Asking Prices Moving Higher
By Joe Taylor Jr.
CMR Columnist
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Whether you believe the real estate market is crashing to a halt or simply cooling off after a hot streak, you can see some major changes in the way that home sellers set their asking prices. As mortgage rates increase and homeowners worry about repaying home equity loans, real estate agents help clients find clever ways to offer bargains without changing a home's asking price.
Sellers frequently set an asking price that reflects how much they have left on their own mortgages, as well as the overall market conditions in a region. Veteran real estate agents note that sellers often hesitate to reduce their asking prices, causing their homes to stay on the market longer or to remain unsold. As a result, according to at least one economist, the remaining transactions show a steady increase that doesnt reflect the realities of the mortgage and real estate markets.
Savvy Realtors Use Mortgage Rates to Lure Buyers
With mortgage rates rising, buyers are taking more time to analyze deals. Therefore, expert real estate agents work harder to move homes off the market quickly. Some real estate agents help prospective buyers obtain preferable mortgage rates for larger properties. Other deals include bonus perks or rebates, such as paid closing costs or the use of vacation properties.
If you don't intend to sell your home anytime soon, changes in asking prices can still affect your budget. If you tapped a home equity loan or home equity line of credit based on what your asking price might be on last year's market, experts suggest you should consider refinancing to avoid an "upside down" loan. Mortgage rates on fixed-rate refinancing loans are usually lower than those on home equity loans. Locking in a mortgage based on todays assessment value can protect you during a real estate downturn, according to mortgage analysts.
Sources
New York Times
Washington Post
About the Author
Joe Taylor Jr. coaches musicians, entrepreneurs, and other adults that want to shift their careers. He holds a Bachelor of Science in Communications from Ithaca College.
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