Will rising mortgage rates cool off a hot housing market?
Are you trying to find a time to get back on your home search? You tried last year, but competition was too steep and you were unable to secure your dream home. Then, enters 2022 and you feel it's simply a repeat of last year EXCEPT with higher interest rates and rising home prices. For many, the idea of home ownership seems bleak and frankly unaffordable. However, make no mistake that it's still a good time to cast your net! There just may be a little adjusting and compromising that needs to take place.
Read on to learn more about the effects of high interest rates and how you can combat that and still obtain your dream home. After reading, you should contact a lending professional to discuss your options and any programs that might be able to assist you. We recommend Dash Home Loans.
In a rising interest rate environment, buyers must shop below their max buying point to compensate. An article for NPR explains, "If you look at interest rates alone, the 2 percentage-point rise in interest rates we've seen so far adds $115 to the monthly payment for every $100,000 you borrow on a 30-year loan."
Six more increases are likely between now and the end of 2023, according to a report from the New York Times.
Therefore, keeping an eye on interest rates and making sure you have re-approval with your lender every few weeks if you haven't found anything yet is a MUST. Also, check with your lender to find out what programs they might have available.
A benefit for some home buyers is that rising rates will price some people out of the market. "For some buyers, general inflation and related mortgage rate hikes mean less budget flexibility to pursue freshly listed homes," a report from CNBC explains. "For those who can afford to persist, a silver lining could be relatively less competition for more for sale home options, which could lead to some relief from relentless home price momentum."