There are many stunning homes for sale in St. Helena, CA, with properties ranging from boutique wineries and grand estates to charming residences within easy walking distance of downtown.
Buyers and sellers alike are asking us what the rising mortgage interest rate might mean to the wine country real estate market. Will it slow the market? Could it put homeownership out of reach for some buyers? Here’s what we know so far.
No one debates that housing prices in California are incredibly high. Thanks to the Federal Reserve’s latest interest rate hike on June 15, it’s about to get higher. The 0.75 increase is the agency’s third this year and the largest since 1994. While the move aims to counter a rapid inflation pace, it has many sellers and buyers worried about what the future could hold.
For home buyers, the hike means the average 30-year, fixed-rate mortgage rate rose from 5.23% to 5.78%. That means a $300,000 mortgage that once cost about $1653 a month will now cost $1756 and add nearly $40,000 to a loan over its lifetime.
For sellers, the rate spike could result in reduced demand, meaning they might need to decrease asking prices to attract buyers.
However, experts say all is not gloom and doom. For instance, they believe if the economy grows quickly enough, rising interest rates won’t significantly affect housing prices or property values, assuming wages and salaries continue to go up as well. They also think less demand for housing could help alleviate some of the housing supply crunches being felt across the country, giving prospective buyers more housing options to choose from.
Conventional real estate wisdom says spiking interest rates make buying or selling a home more difficult. But the country’s current economy is strong, and, assuming it continues to grow, this recent spike in interest rates should not paralyze the wine country real estate market. If you want to learn more about interest rate increases and what it means to your home buying or selling activities, or if you’re interested in viewing one of our St. Helena, CA listings, talk to one of our Napa Valley real estate agents today.