Are Higher Mortgage Rates Here To Stay?

Are Higher Mortgage Rates Here To Stay?

If you're thinking about making a move in the real estate market, there's no doubt that you've heard about the recent increase in mortgage rates. As a potential buyer, you may be wondering if these higher rates are here to stay and what effect they may have on your plans. In this blog post, we will explore the current market conditions and provide you with the information you need to make an informed decision about whether to delay your plans or not.

The primary reason for rates increasing is higher inflation and a lower amount of homes on the market. Some areas are seeing more homes on the market and lower prices, and home seller's willing to pay for buyer's closing costs or an interest rate buy down, which helps buyers afford a lower monthly payment.

So, should you delay your plans to buy a home or proceed as planned? Let's examine the factors to consider:

1. Affordability: Higher mortgage rates mean increased monthly payments, which can impact your budget. If you're on the edge of affordability, it may be wise to reassess your financial situation and determine if you need to adjust your housing expectations.

2. Housing Inventory: The real estate market has been experiencing a shortage of inventory, leading to intense competition among buyers. While higher rates may deter some buyers, it could also reduce the competition and give you a better chance of securing a property.

3. Future Rate Predictions: While no one can accurately predict the future, experts foresee a gradual increase in mortgage rates over the next year. If you believe rates will continue to rise, waiting may result in higher interest costs in the long run.

Ultimately, the decision to delay your plans or proceed with your purchase is personal and depends on your individual circumstances. To gain a better understanding of how higher rates could impact your specific situation, it is advisable to consult with a mortgage lender. If you need professional lender recommendations, contact me.

NOT ALL LENDERS have the same programs or rates (rates vary depending on your credit score and how much each lender adds to the Fed 10 yr treasury interest rate that they quote you). 

Remember, the real estate market is constantly evolving. Staying informed and understanding the impact of higher mortgage rates will empower you to make the right decisions as you embark on your home-buying journey.