The average 30-year fixed mortgage rate from Freddie Mac has risen to 5% in recent weeks. While this news may make you doubt the timing of your house hunt, the truth is that it has never been more crucial. Even if you're tempted to put off your plans in the hopes that rates would drop, doing so will simply cost you more money. In the coming year, mortgage rates are expected to continue to rise.
Here are a few things to keep in mind if you're considering about buying a home, even if mortgage rates climb.
Mortgage rates are an important factor to consider while looking for a home. As interest rates rise, so does the amount you'll pay in monthly mortgage payments, which has a direct impact on how much you can comfortably afford. Consider the following example of how a quarter-point rise can have a significant influence on your monthly payment (see chart below):
You've probably already felt the impact of rising mortgage rates on your purchasing power. Instead of postponing your plans, today's rates should encourage you to buy soon, before rates rise even further. Use that drive to re-energize your search and map out your next moves.
Working with a trusted real estate advisor now is the best way to prepare. An agent can connect you with a reputable lender, assist you in tailoring your search to your budget, and ensure you're ready to make an offer swiftly when the time comes.
Rising rates should be viewed as a motivator to buy sooner rather than a reason to wait for serious buyers. In the long run, waiting will cost you more. Let's connect today so you can gain a better understanding of your budget and be ready to buy your home even before interest rates rise.
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