Shopping for a home should be a happy experience. However, with this competitive buyer’s market, you may feel discouraged at times.
Such demand for real estate is the combination of low inventory and low-interest rates. When you hear that interest rates will increase, you may think that is a bad thing. But it may not be so bad after all.
What Do Increased Interest Rates Mean for You?
For the last two years, we have had extremely low-interest rates. These record lows indicate a struggling economy as people lost jobs through the pandemic. Now that the country is rebuilding and people are working more, it is less likely you will secure a mortgage rate under 4%.
Interest rates are likely to increase as the real estate market continues to boom, but they are still comparable to what people paid in 2018. Just because they are higher than they were during the pandemic does not mean these are out-of-the-park mortgage rates.
Let’s take a look at how rising interest rates may be beneficial to the home-buying process:
Interest Rates Should Not Stop You from Buying: The first tip that you must understand is that higher interest rates should not deter you from buying a home right now. Of course, you may be tempted to give up when housing prices continually increase, but getting into the real estate market sooner than later will pay off in the long run.
There Will Be Less Competition: Other buyers looking to invest in additional homes because of the low-interest rates may no longer be making those offers as you are trying to get your foot in the door. You will not have to worry about so much competition as some potential homeowners will decide they no longer want to buy with these current mortgage rates.
Rate Changes Do Not Change the Monthly Payment Drastically: Remember that with a mortgage rate of 3%, you can calculate your payment over 30 years. Your monthly payment does not double when you do the math with a 6% rate. The interest is spread throughout the 30 years and can change your monthly payment by a couple of hundred dollars, depending on your house budget.
Now that you know not to be scared off by rising interest rates, you can start looking for the right home for your family. Nobody should be stuck in their current living situation if it is not a good fit. And once you own a home, you can enjoy the benefits of a booming real estate market.
House Hunting with a Trusted Real Estate Team
No matter what the current interest rates are, it is vital to have a trusted team on your side to guide you through the home-buying process. Instead of guessing what will set you apart from other offers, have a real estate professional use their strategies to ensure that you get the home of your dreams.
Buying a home is a huge decision, so it’s understandable to be nervous about rising interest rates. Instead of freezing in place, afraid to make a decision, keep learning and overcoming potential obstacles in the real estate market so that you can become a homeowner with the least amount of risk. Once you are armed with knowledge, you can make sensible decisions for your family.
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Questions about real estate?
Do you have questions about the real estate market or the market changes in your region? We are standing by to help and answer any questions that you have. If you are unsure if it is the right time to sell or buy, you can seek help from experts who know the market. Our advisors will advise you on the right move for your family’s situation. If you are on a time crunch, you can seek counsel on how to best navigate the sale of your home during a buyer’s or seller’s market.
At Blondin Real Estate, we are always here to help; contact us!