Increasing Interest Rates – Can I still buy?

Are you looking for housing this year?  Maybe you are a renter looking to become a homeowner.  Maybe you are graduating and looking for your first housing and are on the fence about renting or buying.  What is it like to be a buyer today?  There are so many hurdles for buyers at the moment but this doesn’t mean you can’t buy. It just increases the reasons to be sure to work with a professional that will be working towards your same goals.  

Home sales prices are increasing and most homes are selling for over the asking price.  Sellers are receiving multiple offers on their homes.  As a buyer, if you are trying to stay within a budget, avoid looking at only homes that are at the top of your budget.   

Interest rates are increasing and causing increased monthly payments.  An increase as little as a half of a percent in interest rate could mean an increase of about $28 per $1,000 on monthly payments. This means more than busting your budget – it could also mean lowering some buyer’s mortgage approval options.  Interest rates are currently the highest they have been since May 2019 but they are still not as high as they were in the 1980’s when the average interest rates were about 18%.  

Purchasing a home is a great way to build your wealth portfolio.  You build equity over the years when you purchase a home.  For example, $2,000 in monthly rent could easily equal almost $50,000 in equity over a two year time period.  To protect that equity, don’t forget to include property maintenance in your budget because you must maintain the home to keep it in good condition to maintain that equity.  Monthly rent prices jumped an average of 14% this past year and some larger city locations saw an increase of about 30%.  Take control of your housing costs and start building your equity instead of your landlord’s.  

But don’t get me wrong, homeownership is a big responsibility and may not be your cup of tea.  You will be responsible for all of the upkeep and repairs. Only you know what best suits your life but if you are looking to become a homeowner, your top priorities right now should be to pay down any debt you currently have and work on improving your credit score so that you are ready when it’s time to finance your future home.  The current home market requires you to increase your mortgage approval options in as many ways as possible.  

We are here to answer your home buying questions and help navigate all the hurdles and obstacles along the way.  Call us today and take advantage of our experience and our team of professionals.