Higher interest rates aren’t hurting the real estate market, at least not in the Greater Lehigh Valley.
December data reported by the Greater Lehigh Valley Realtors show that the housing market is willing to accept the higher mortgage rates that resulted from the Federal Reserve raising interest rates at the end of 2015, the first increase in nearly a decade.
According to GLVR, closed sales were down 5.3 percent for the month, to 595 from 628 the month prior. New listings were down 16.8 percent to 505 from 607. However, it said pending sales increased 42 percent from 383 to 544.
“Prices continue to build traction,” said Jim Zurn, president of Greater Lehigh Valley Realtors, “even after the Federal Reserve increased rates in December, and we expect a balanced market for the foreseeable future.”
Brad Patt of Berkshire Hathaway Home Services Fox & Roach, Coopersburg, said he doesn’t see the small uptick in interest rates as having an impact.
“We haven’t really seen much of a change on the street with mortgage rates. Rates are still in the upper-3 and lower-4 percent range, which, when you look at the 30-year average of between 6 and 8 percent interest, is phenomenal.”
He said Realtors are keeping an eye on the stock market, however.
“The stock market started the year sharply down. I’m sure that will have an impact,” Patt said.
At this point, he said, he believes the Fed likely will raise rates one or two times during 2016. That shouldn’t have too deep of an impact on home sales, he said.
Patt noted that the housing numbers for December, year over year, are actually quite good.
He said from December 2014 to December 2015, pending sales were up 16.6 percent and closed sales were up 11.4 percent.
“Which is excellent,” Patt said.