Mortgage rates are on their way up, but is this actually a good thing for investors flipping San Diego real estate?
We’ve recently seen a massive jump in mortgage interest rates, with CNN Money reporting the increase to the largest leap in over 26 years.
News headlines like this may sound scary, but that doesn’t mean it is necessarily a bad thing for investors flipping San Diego real estate. Press coverage could be the vehicle that fuels investors flipping San Diego real estate to new heights.
To put it into perspective, interest rates are still half of what many were paying in the last boom. Accordingly, home prices are still on average 30% below previous peaks.
So how might rising mortgage rates actually help investors flipping San Diego real estate?
First off, they create a lot of urgency among sellers. This makes them more motivated to close deals fast. This includes individual homeowners with equity, in foreclosure and attempting short sales, as well as banks with REOs and non-performing loans.
Secondly, high rates make banks a lot more eager to make new loans, relax criteria and even make riskier loans. They can always make it up in interest on performing loans. That means more borrowers qualifying and increased lending volumes.
This helps to improve the wider economy; fueling hiring, wages, more home buying and of course ultimately pushing up home prices.
In the meantime, it certainly adds more motivation for current buyers to move faster and take a deal. So if there was ever a time for investors flipping San Diego real estate to turn up the heat, this is it.
