Home prices to stabilize as mortgage rates increase

Published: Sep. 20, 2022 at 4:18 PM EDT|Updated: Sep. 20, 2022 at 4:19 PM EDT
Email This Link
Share on Pinterest
Share on LinkedIn

MARQUETTE, Mich. (WLUC) - National mortgage rates have hit their highest point since November 2008.

They are now over 2.5 percentage points higher than at the start of this year. Range Bank Chief Home Mortgage Services Officer Brian Syrjala said the Marquette area is seeing similar trends.

“About a year ago mortgage rates in Marquette were around 3% and right now they are north of 6%,” Syrjala said.

Syrjala said the housing market has remained active in the Marquette area and demand is still there, but it has slowed down compared to last year. Syrjala added that potential sellers are working with banks to invest in renovations to their homes, allowing them to enter the market at rates viable for the seller, and a safe investment for the buyer.

“With the increase in rates, people aren’t refinancing or touching their first mortgage so what that does is people are coming in and taking out home equity lines who aren’t buying houses and they are fixing up their current house. This allows for that property to stabilize in value,” Syrjala said.

As a result, Syrjala said buyers are providing offers closer to the asking price.

“Last year at this time we were seeing more purchase agreements with escalation clauses in them where people were going over the asking price. We’re now seeing more of just full price offers, not so many escalation clauses,” stated Syrjala.

Meanwhile, potential sellers are working with banks to invest in renovations to their homes, closing the gap between what they owe on their original mortgage and the potential market value of the house.

“With the increase in rates, people aren’t refinancing or touching their first mortgage so what that does is people are coming in and taking out home equity lines who aren’t buying houses and they are fixing up their current house. this allows for that property to stabilize in value,” Syrjala said.

Fran Sevegney of RE/MAX 1st Realty said the median home sale is $200-225 thousand in Marquette County and home buyers are continuing to move to the area for the quality of life, the opportunity to work from home, and to get out of the city.

“With prices sticking where they’re at, we’ve had a good amount of buyers. It’s kind of a calmer market, it’s stable, it’s a good time to be a buyer and seller,” Sevegney said.

Sevegney said looking forward, he does not see home prices dropping any time soon.

“There’s just too much demand for it and we’ve had kind of repressed values for a long time; we did not have the increase during the pandemic and prior to. Now we’ve caught up to the national trends which show where we would’ve climbed to if things were normal,” Sevegney said.

Sevegney said getting pre-approved for a mortgage is the first step in entering the housing market.