What’s going on with mortgage interest rates in our market?
Quotes will vary depending on who you talk to, but generally speaking, rates are rising. At the beginning of the year, they were hovering around 4%, but now they’re creeping closer and closer toward 5%.
What does this mean for buyers and sellers?
If you’re a buyer, the longer you wait to buy, the more it will end up costing you. The higher rates rise, the more they’ll restrict your affordability. For example, if you qualify for a $200,000 mortgage and rates rise from 4% to 5%, that will increase your monthly payment by $125. Over the course of a year, that monthly payment really adds up. Also, keep in mind that home prices are rising as well, which means that a house that cost $200,000 a year ago may cost $210,000 now.
If you’re a seller, the same news applies if you plan on buying another house after you sell your current one. Though you might be able to sell your home for more as prices rise, you’ll also have to pay a higher mortgage on your next house. Additionally, some economists believe that prices will eventually level off as rates continue to rise, so that’s another reason you might be better off selling sooner rather than later.
No one knows what the future holds, but that’s where conditions are trending. In general, we’re seeing a bit of a slowdown in our market as we head toward the end of the year, but that’s normal as the season changes. Overall our market is still strong. We still have a shortage of inventory, and homes are still selling. If buyers pull back because of decreasing affordability, however, that might change things.
As always, if you have any more questions about our market or you’re thinking of buying or selling a home soon, don’t hesitate to reach out to me. I’d be glad to help you.