Buying a home in Austin amid rising interest rates
Interest rates might be rising, but it's still a good time to buy a home in Austin.
Driving the news: The Federal Reserve slowed down its campaign of interest rate increases last week, raising its target interest rate a quarter percentage point after months of more aggressive steps, and signaled that more increases are ahead.
Why it matters: Rising interest rates make borrowing more expensive, which could price already fatigued buyers out of the market.
Yes, but: Average home prices started to creep down, especially in Austin's suburbs, and higher interest rates have helped calm down the competition.
What they're saying: We checked in with Spyglass Realty owner and broker Ryan Rodenbeck, who offered negotiation strategies for buyers and sellers.
What negotiation strategies are beneficial to buyers and sellers?
"Buyers can capitalize on homes that have higher-than-average days on the market by offering lower prices. Additionally, they can ask for closing costs to buy down the rate, which allows them to get a rate locked in that is lower than what is currently available.
Sellers can put themselves in a better position to negotiate by making updates and repairs to their home and presenting it in the best possible light."
Is it still a good time to buy in Austin?
"Now is an excellent time to buy in Austin. We’ve seen a drop of over 20% in value in a city that has a historical appreciation rate of 10% year-over-year for the last 20 years. We're also in one of the country's best job markets, so I believe those historic appreciation averages will continue."
What's next: "The Fed is dedicated to slowing inflation. If that isn’t happening, it’s likely they’ll continue to raise interest rates," Rodenbeck predicts. "I believe we’re at, or almost at, the peak of the rate hikes."
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