Are Higher Mortgage Rates Here To Stay?
Recent increases in mortgage rates have garnered a great deal of attention from the media.If you've been keeping up with the news, you may have noticed that rates have recently reached their highest point in over two decades (see graph below):
When you're about to make a move, that can feel like a punch in the gut.
The following information will help you decide if you should put off your plans.
How Higher Mortgage Rates Impact You
It's true that mortgage rates are higher now than they were a few years ago. And when rates go up, it makes homes less affordable overall. This is how it works. The higher the interest rate, the more expensive it is to borrow money to purchase a house. As interest rates increase, so does your monthly mortgage payment for your future home loan.
The Urban Institute talks about how this affects buyers and sellers right now:
“When mortgage rates go up, monthly housing payments on new purchases also increase. For potential buyers, increased monthly payments can reduce the share of available affordable homes . . . Additionally, higher interest rates mean fewer homes on the market, as existing homeowners have an incentive to hold on to their home to keep their low interest rate.”
Some individuals are delaying their plans due to the current state of mortgage rates.However, you want to know if this is a smart strategy.
Where Will Mortgage Rates Go from Here?
Many buyers are waiting for mortgage rates to go down right now. Too many are holding their breath for that to occur, and here's the catch. It's unknown when its going to happen. No one, not even the experts, knows what will happen next.
Although it has been predicted that interest rates will decline in the next months, the most recent data indicates that rates have actually been increasing. This discrepancy illustrates how difficult it is to predict mortgage rates.
My finest piece of advice for moving is this: let go of the things you can't change.This involves speculating on the future direction of mortgage rates or trying to time the market. According to CBS News:
“If you're in the market for a new home, experts typically recommend focusing your search on the right home purchase — not the interest rate environment.”
Instead, focus on assembling a team of qualified specialists, such as a dependable lender and real estate agent, who can explain what's going on in the market and what it means for you.If you need to relocate because you're changing jobs, want to be closer to family, or are in the midst of another major life upheaval, the correct team can assist you even now.
In Conclusion
The best advice for making the move is to avoid trying to control what you can't, particularly mortgage rates. Even the experts are unsure where they will go from here. Instead, concentrate on forming a team of trustworthy experts who can keep you informed. Let's talk when you're ready to begin the process.
Post a comment