2022 and Rising Mortgage Interest Rates
The average interest rate for a mortgage has moved off of the all-time lows experienced over the past couple of years. While this can seem depressing if you’re only now ready to buy a home, the good news is that interest rates remain low relative to historical patterns. In other words, compared to even five or ten years ago, rates are still generally lower than they were at that time. Even if rates continue to rise, which is a likely scenario, the rates are moving back into territory that they were in just prior to the pandemic.
The difference is that the costs have increased for the average house. This is what currently makes purchasing a home more expensive than it otherwise has been. This was primarily driven by a red-hot market where the existing home inventory was purchased and not replenished. Most predictions indicate that this trend should abate, if slowly, over the remainder of the year. This will gradually apply the brakes to rising home prices, which may cause many to think a little harder about purchasing a new home or selling their existing home.
If you are unsure of the right decision, here are some things to think about.
Why Do I Need to Buy A Home Now?
Every prospective home buyer has a unique situation. While the future is impossible to predict, it makes sense for many buyers to go ahead and purchase a home now. While prices are up, interest rates remain low. If a new job, family addition or other change introduces the need to move, then there is good reason to purchase a new home.
While a home is ultimately your largest investment, certain details are just as important when it comes to considering the need to move closer to a new job or the need for another bedroom. These factors must be taken into account when considering a move and will vary based upon each unique situation. Sit down and, if necessary, construct a list of why you want to move. This will help you with judging if the move is worth it or not.
Delaying a move, if space is tight, might not make sense. No one can decisively predict when home prices might fall. There is simply no guarantee that they will. So the best strategy may not be to hope for the best if you know you will need to move in the near term.
It can help to talk with a Mortgage Broker or Real Estate professional if you are uncertain if it really makes sense to move. They can answer any questions that you may have such as details about financing or trends in your desired market. Either can be a helpful guide to look at the situation objectively.
Plan On It: Interest Rates Are Likely to Continue to Rise
While home prices remain elevated, interest rates are beginning to rise. This can be a bit of a double whammy if you plan to wait. While the market could cool and prices shift downward, the market could just as easily stay put or even increase if the right economic or political conditions occur. No one truly knows the answer.
For example, a $400,000.00 mortgage payment increases over two hundred dollars per month if the interest rate jumps one percent. So while a 0.25% or 0.50% increase might not seem like a lot, a rising rate can quickly change what you may be able to afford.
Range Lending is here to help you find the best mortgage rate for you. Our team is known for prompt, professional service with a truly quick time to closing. Talk to one of our expert Mortgage Brokers today to learn what options are available to you in the current market. You can obtain a free quote with no obligation if you would like to learn more about your mortgage options.