By Lauren Billingslea Dowlen
Luxury Sales Associate



Ten years after a major housing market collapse that triggered a global recession, the U.S. Federal Reserve has taken a long-anticipated step as our economy has strengthened. The bank has begun to raise the Federal Funds rate, the interest rate in which banks lend to each other, in order to keep inflation at bay. Just last week the Fed announced that inflation is indeed climbing. In response, markets have adjusted the fixed 30-year mortgage interest rate. It has fluctuated slightly and at the time of this writing is at about 4.55%. Will today’s higher rates, compared to rates a year ago, affect the sale of your home?

Financial and housing professionals weigh in with differing views. Some economists and analysts note that historically there is not much of a direct correlation between mortgage rates and home sales and prices. In a stronger economy, homebuyers tend to have more cash flow and can more easily absorb higher monthly mortgage payments as a result of higher interest rates.

On a national scale, a recent survey by Redfin reported that only 6% of homebuyers said they would cancel their plans to buy if mortgage rates surpassed 5%, and a healthy 25% said rising interest rates would have no impact on their home search. And a poll by Gallup this week noted that 65% of Americans feel it is a good time to buy a house.

Another factor in the sale of your home is the impact of the tax overhaul bill passed by Congress in late 2017. The Miami Association of Realtors reported this week that in our market, luxury home sales over $1 million have increased nearly 10% when comparing March 2018 to March 2017. This may be due to the new deductions cap of $10,000 for income, sales and property tax: Homeowners in states with higher property taxes and state income tax are seeking real estate in states such as Florida, which has no state income tax and tax incentives for businesses.

What does this mean for the sale of your home? Be realistic about the price of your home. Even with higher interest rates, homes that are well-priced are being absorbed, and quickly. An excellent comparative market analysis by an educated and dedicated Realtor is a good reality check as to how your home may be relevant to other properties. Find a Realtor with a wide network of potential buyers, both locally, nationally and internationally. Our local trends in Miami-Dade County show a balanced market between buyers and sellers. Now is a perfect time to make the move you have been considering.

Our team at Lowell International Realty works with you to help you achieve your real estate dreams in this evolving market. Call me today to discuss what those dreams may be for you, and how I can provide our signature concierge service throughout the process. Read about me and our boutique firm here.

Sources: Bankrate, Gallup, Redfin, Value Penguin, Federal Reserve Bank of St. Louis, Miami Association of Realtors









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