Summit’s Final Monthly Market Report for 2016 Available

Chief Valuation Officer takes a look at the impacts of rising rates on the US housing market

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DES PLAINES, IL — January 4, 2016 — Summit Valuations, LLC, a full service valuation company, announced today the release of its final Residential Real Estate Market Overview for 2016, which is based on data collected during October 2016, the most current industry information available. The Report includes analysis from Summit’s Chief Valuation Officer, Mark Melikian, author of the report, and focuses, in part, on the seasonal variation in home prices. In this month’s report, Melikian took a closer look at how rising interest rates could affect the US Housing Market.

In this month’s report, Melikian pointed to a Freddie Mac report indicating the interest rate on a 30-year fixed rate mortgage in October 2016 was 3.47%. In September 2016, the rate was 3.46% and in October 2015 the 30 year mortgage rate was 3.8%, which is a decrease of 33 basis points year over year. Since then, the Fed has announced a new rate hike.

“An increase in mortgage interest rates is upon us,” Melikian said in his report. “Based on historical patterns, in the short term, we will likely see a spike in sales activity created by potential buyers who have been in the market with no sense of urgency to make a purchase. Some of these buyers will be forced into making a move as they see the initial rise in interest rates as the start of an upward trend.”

Melikian pointed out that after the initial spike in sales, the most likely trend will be a slowdown in sales activity as buyers adjust to the new reality of increased mortgage interest rates. Then, some buyers will begin to turn to adjustable rate mortgages. In most instances, an adjustable rate mortgage will give a buyer more purchasing power since it offers a lower starting interest rate.

“History shows us that the real estate housing market will adjust to whatever the current interest rates are,” Melikian added. “From the highs of mid 18 percent, 30 year fixed rates in the early 1980s to the lows of nearly 3.25 percent at the end of 2012, the housing market has, and will continue to find ways to adapt.”

Elsewhere in the housing economy in October, the unemployment rate, median sales price and the months supply of housing all decreased year over year. Meanwhile, mortgage interest rates, the seasonally adjusted number of homes sold and the pending home sales index all increased.

On a regional level the South had the highest number of existing home sales and the West had the highest median price. All regions experienced increases in the number of seasonally adjusted existing home sales with the South having the highest increase at 2.8%, month over month. All regions but the West experienced decreases in median sales price, month over month. The West’s gain was a modest .1%.

Summit’s report provides data made public by the U.S. Government, the National Association of Realtors and Freddie Mac. Melikian has been appraising real estate since 1987 and has been active in nationwide valuation services since 2005. He has successfully led teams of analysts, developed valuation services to meet client needs and represented buyers and sellers in secondary market loan tie out meetings. Much of his recent experience has focused on forensic reviews of REO properties for Fannie Mae and Freddie Mac. Mr. Melikian holds a B.S. in Business Administration from San Diego State University.

About Summit Valuations:

Summit Valuations LogoSummit Valuations, LLC, Niles, Illinois, was established in 2007 as a full service valuation company offering a single source for nationwide real estate valuations, including residential and commercial BPOs, inspections and full appraisals. The founders applied over 20 years of national real estate experience to build a company that has built its reputation based on higher standards and superior results. All reports can be delivered to our customers via email or downloaded from our secure website. The company’s services are designed to offer faster turnaround times, thorough quality assurance, streamlined ordering and delivery processes, and accurate results. As one of the fastest growing property valuation companies in the country, Summit is dedicated to accuracy and unparalleled customer service. Find out more by visiting the company’s website.

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