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The Truth: Taking out a High Interest Rate Mortgage VS. Becoming a Long-Term Renter

Monday, May 20, 2024   /   by Matthew Lawson

The Truth: Taking out a High Interest Rate Mortgage VS. Becoming a Long-Term Renter


How Interest Rates will Impact Home Values in the New Year





Now that we’ve rung in the New Year it’s time to refocus, reenergize, and plan for the next year in Real Estate. A common question and topic this time of year is what we expect from the real estate market both in terms of home values and interest rates. This year is going to be a true test for our Real Estate market as we wade through the muck of misinformation and data surrounding our economy.





There are multiple key elements when it comes to home values and pricing of Real Property. The first, and likely most important element, is market competition or current Active listings. Simple supply and demand rules apply here so if there is an abundance of listings on the market there is going to be a shortage to demand driving prices down. I’ve referenced historic listing counts many times in previous blogs so check those out for a better definition.





Current listing counts show that the number of available listings on market today is higher than the same time last year. As more homes are available consumers have more options, but what isn’t addressed in the numbers is the quality of the available housing. Not all listings are created equal so the quality and condition of the home is coming into play more often than years prior. 





The second key element in home values is the current nominal interest rate. This undeniably has had the largest negative impact on the real estate market today as rates recently peaked at nearly 7%. As rates have decreased into the 6% range buyers are becoming more accepting of the rate but looking to sellers to help provide concessions. If a seller is willing to provide more concessions the loan becomes more affordable while retaining home values. 





Another key element in home values is consumer confidence both in the housing market and economy. As we’ve discussed before this has become increasingly more difficult to navigate as news outlets attempt to boost their ratings with increasingly negative information and misinformation campaigns floating around on social media. The truth that is undeniable is that consumer confidence in the economy has decreased considerably from this time last year. A common side effect is a decrease in confidence in the housing market and home values. Unfortunately, it’s far too early to tell what to expect from the economy this year. However, we are confident that this year will be pivotal to our housing market and only time will tell. 





How can you prepare yourself for the unknowns in the market?





Buyers, now more than ever you need to be aware of the home’s value, both in condition and price. We are going to see some homes selling for 90 – 95% of their list price, but not all homes are created equal and not all offers are equal. The best thing you can do for yourself is prepare and make yourself more marketable to a seller. Sellers are going to be looking for simplicity in the offers they receive and in many cases will be more negotiable the simpler and more straight forward an offer is. 





Start with a pre-approval from a legitimate, local lender that is reachable and easy to communicate with. Partner with an educated and experienced Realtor to help identify ideal properties that understand the area and the current market. Lastly, understand recent sales comps and values to know when a property is properly valued or overvalued; your Realtor should help with this. Know that if a home is priced at 95% of the value of a recent comparable sale and is in similar or superior condition, it’s likely to sell at or close to list price. In comparison, if a home is in inferior condition or priced above recent sales, it’s very likely that seller will be required to be more negotiable. 





Sellers, you will play a large part in the real estate market this next year. It’s going to be extremely important for you to be both realistic on price and negotiable to buyer concessions. You can protect yourself and your homes equity by preparing your home for sale and making it more marketable to the average consumer. First, hire a licensed Realtor with experience in a buyers market to help provide insight into what improvements you can make to your home to be more marketable. Understand that if you have deferred maintenance or your home is considerably out of date you’re not going to get the same price as a fully renovated comp in your neighborhood. Focus on your pricing and know that buyers have more options than years prior and even if your home is perfect a buyer is still likely to ask for concessions to help with their interest rate. Overall, be amendable and know that mutually beneficial agreements are going to win over one sided negotiations. 





Markets are impossible to predict, but with the right guidance both buyers and sellers can successful in this ever evolving market. If I can help in any way or if you just have questions or want to talk Real Estate I can be reached directly at 980-250-2795.





Check out my latest client testimonial! “My wife and I were delighted with the service we received from our Briggs American broker, Matt Lawson. He handled both our sell and buy transactions with complete professionalism and integrity and allowed us to achieve excellent results. The marketing effort he put together for our property was exceptional. We know we weren't his only clients but the responses we received made us feel like we were.” M. Edwards





Matt Lawson, MBA is the Owner and Broker in Charge of Briggs American Homes, a real estate team at REAL Broker, LLC. Matt lives and operates his business right here in Waxhaw, NC and is passionate about all things Real Estate.


Briggs American Homes at Real Broker, LLC
Matthew Lawson
5960 Fairview Rd Ste 400
Charlotte, NC 28210
980-250-2795

Based on information submitted to the MLS GRID as of 6/13/2024 4:06 PM CST. All data is obtained from various sources and may not have been verified by broker of MLS GRID. Supplied Open House Information is subject to change without notice. All information should be independently reviewed and verified for accuracy. Properties may or may not be listed by the office/agent presenting the information. Some listings have been excluded from this website.
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