According to data from Freddie Mac, mortgage interest rates recently climbed over 5.25 percent, their highest level since 2009, and over two points greater than the start of 2022. This can be a scary reality for buyers.
The ever-changing real estate market can create uncertainty about the right mortgage option for you. Here’s our expert advice on the current real estate market and the best way to approach rising mortgage rates as a buyer.
Discovering buyer and seller insights about the current state of the market are important to all potential home buyers. If you’re a current homeowner considering a move, you should also learn how to easily navigate buying a new home while selling your current property at the same time.
Check out these real estate agent insights from 2022:
● 95 percent of agents say it is a seller’s market; down from 98-percent in quarter one (a good thing for buyers!)
● 44 percent of agents say bidding wars are on the decline (making it easier for buyers to get under contract)
● 64 percent of agents say that inventory is lower than they expected
● 66 percent of agents say homes may still get multiple offers, but there are fewer total bids
● To offset rising mortgage rates, 34-percent of agents are seeing an increase in buyers using rate buydowns (which allow them to secure lower rates by purchasing prepaid discount points at closing)
How Interest Rates Impact You
If you’re on the hunt for a new home, the increasing mortgage rates directly impact your monthly payment on your home mortgage. Don’t let increasing rates scare you away from home buying. Instead, turn it into motivation to make a move sooner, before rates increase further.
Where to Start
As a buyer, the best place to start with this timely real estate transaction is to work with a trusted real estate agent who can link you with a reputable lender. With a good agent and lender, you can feel confident that they will adjust your home search appropriately based on your budget and keep the rising interest rates in mind.
Rising Rates a Good Thing?
Although rising interest rates inherently seem bad for buyers, they also can make the red-hot, ultra-competitive market a bit more manageable. Yes, increased rates inevitably mean you will likely pay more over the lifetime of your loan, but it also means some other buyers will be priced out of the market. This results in fewer bidding wars. Fewer buyers in the pool means your odds of getting your dream property are closer than they may seem.
Overall, the increasing rates can seem scary if you’re a buyer in the market. Turn that fear into motivation to act as swiftly as possible. If you’re serious about moving, take action to secure the lowest rate you can and enjoy the fact that there are fewer buyers trying to compete for the limited inventory available.
This sponsored content is provided by HomeLight.
Real Estate Term of the Week
Amortization Term: The amount of time required to amortize (pay off) the loan, expressed in months. For example, for a 15-year fixed-rate mortgage, the amortization term is 180 months.