Maine’s real estate market expected to slow but not stall
BANGOR, Maine (AP) – Mortgage rate hikes expected when the Federal Reserve tightens credit in the new year are expected to slow but not block Maine’s scorching real estate market.
Home prices will continue to rise, but not as fast as this year despite inflation and rising lending rates, experts say.
With inflation accelerating to a nearly four-decade high, house prices have risen 18% nationwide and price relief will take at least a few years, said Mike Fratantoni, economist in head of the Mortgage Bankers Association, at a recent press conference. Bangor Daily News Real Estate Webinar.
âThis, unfortunately, is our new standard,â said Kortnie Mullins, vice president of the Bangor Region Realtors Association.
New construction slowed during the Great Recession, and Maine and other states have failed to meet demand for housing since then, said Tim Wells, director of the Greater Portland Community Land Trust.
Maine currently has about 25,000 homes less than it needs, said Aaron Bolster, president of the Maine Association of Realtors. It might not sound like much in a bigger state, he said, but “it’s a lot in a place of 1.3 million people.”
When it comes to interest rates, the interest rate on a 30-year fixed mortgage is expected to drop from an all-time low of 2.65% in December 2020 to 4% by the end of 2022, a declared Fratantoni.
âA 4% mortgage rate is historically very, very attractive, but this increase should be enough to dampen it a bit,â said Fratantoni.