What effect is the increase in rates having on buyers and sellers?

Question: What effect is the increase in rates having on buyers and sellers?

Chris’ Answer:

Here are three things that have the potential to effect on buyers:

The cost of homeownership has increased.
It is affecting the ability of some buyers to qualify for a mortgage.
In markets such as this, some lenders tend to become a little more conservative. While I don’t expect them to change guidelines, I do expect that they may become more conservative in their pricing.

Sellers could be affected in these ways:

Second home sales, whether houses or condos, may begin to slow. This is a big part of the St. Croix market.
Investment and speculative buying may also begin to slow. These buyers are likely to search out other investment options which may be more attractive as rates increase.
As the real estate markets and players try to “right size” themselves after a few boom years, we may find that Days on Market will be affected.

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