You've seen the headlines and heard the chatter - mortgage interest rates have gone up. How long will this last? Will this be a return to renting for people who were thinking of buying a home? Or is it just a small adjustment in the overall scheme of things?
It's important to remember that rates are coming off historic lows as extraordinary measures were taken to keep the economy afloat during the pandemic. Current interest rates are still below the 50 year average and well below the highs of the early 80s. So, what does it really mean for home buyers when rates rise? As a basic point of reference, a percentage point increase for the average home purchase of $100,000 might mean about $30-$50 more on your monthly house payment. So yes, it does go up - but interest rates aren't always the deciding factor when it comes to whether buying a house is right for you. Interest rates are still lower than they have been in the last decade, but should this bump in rates stop you from buying?
Interest rates are important but it isn't the deciding factor on whether to buy a house or not. It's really the house and the price that is important. If you find a house that you love, don't let the current interest rates prevent you from moving forward. Prices are falling and you have more room to negotiate as the local market adjusts to changing interest rates. If you can go out and negotiate to get a fair deal on a house, the rate environment that we're in could still be very affordable.
NOW is a good time to buy! Don't let rates lock you out buying your dream home. Instead, consider locking in a rate and payment now. If the rates fall, you can refinance with more favorable terms later, should they become available. However, if the rates go up, you'll be happy you purchased the house when you did.
This is not a commitment to lend; not all borrowers will qualify. Equal Housing Lender. NMLS #110139. A division of Amerifirst Financial Corporation. Not Intended as Financial Advice; consult your own professional.