Rising Interest Rates: Their Effects on Home Buyers
Author: Zoey Gerstel
Date: 02.16.22
Read Time: 7 Minutes | Blogs
Location: Virginia Beach, VA
If you're on the hunt to purchase a new home, you’ve probably got your eyes locked on the market.
With short-term interest rates close to zero, the Federal Reserve announced that coming March they will be seeing an increase. This comes shortly after Freddie Mac's latest 30-year fixed-rate mortgage average hit a high of 3.45%.
All of these rate increases could moderate the demand and competition within the housing market, but it can also decrease affordability and make home buying unobtainable for many people.
Verify my mortgage eligibility (Nov 24th, 2024)So what does this mean for you, a potential homebuyer?
What does this mean?
Home Buying isn’t a straight-set of instructions that everyone follows. Home buying is objective and ultimately depends on your financial situation.
With rates and home prices rising, most people feel as if they are priced out of the market, but that is not always the case. Many homes and families qualify for different loan options with different rates and various terms. While a 30-year-fixed loan might not fit your personal finances, an adjustable-rate mortgage might.
It is so important to discuss rates and options with a CMS loan officer before pulling yourself out of the home buying race.
What now?
Verify my mortgage eligibility (Nov 24th, 2024)While mortgage rates are climbing, they are still less than half of the historic average. In combination with rates rising, home price growth continues to accelerate. Home prices are projected to continue rising in 2022 and eventually slow down, but will not reverse.
That means interest rates and home prices will soon be increasing at the same time. So, if you are financially stable and ready to make a home purchase, you should do it sooner rather than later.
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