Rising Mortgage Rates Force Buyers to make offers
You’ve likely heard that mortgage rates have risen and you are considering buying a home . It’s normal to wonder how mortgage rates will affect your homeownership plans, since they have risen by 2 percentage points.
Buyers are responding in one of two ways today. They’re either buying now to avoid higher rates or waiting for rates to fall. We will look at the context to help you understand why so many buyers are taking action and not waiting for rates to drop.
How the Current Mortgage Interest Rate Compares with Years Past
How today’s mortgage rates compare with historical data could be a factor in your decision to purchase now. Although rates are higher than the average 30-year fixed mortgage rate in recent years ( see graph below ), the rates of the current rates are still relatively low when you consider the larger picture of where rates have been over the past few decades ( ).
Mark Fleming is Chief Economist at First American. explains this way:
This context is crucial when deciding whether you should buy now or wait. You still have a chance to lock in a mortgage rate today that is comparatively lower than it was in decades past. You can even take advantage of our Lock&Shop Program which allows you to lock the rate when you are pre-approved for up to 180 days. Additionally, I will refinance you when or if rates are more favorable with a no lender fee option, this is like getting your cake and eating it too.
What happens if rates rise further
The buyers are motivated to act now because rates have risen steadily in the past year and they want to be ahead of any future increases.
Why? Why? It’s likely that buying a home will cost you more if you wait. Experts predict that mortgage rates will rise, although more moderately, in the coming months. is explained by Odeta Kushi (Deputy Chief Economist, First American).
“. . . Inflationary pressures will continue to push mortgage rates higher in the months ahead .
If you are financially capable and ready to purchase now, it might make more sense to move quickly. is the opinion of Nadia Evangelou (Senior Economist, National Association of Realtors):
” With higher interest rates in the future, there is no reason to delay buying a home. You should look for a home if you are financially secure.
There is no one right way to decide when you should buy a house. Your goals, your financial and your personal situation will determine what you should do. This information can be combined with the assistance of local real estate professionals to help you make an informed decision about what is best for your situation. Calculated risk Bill McBride sums it best.
“. . . If you are unsure whether to wait or buy now, it might be wise to act sooner than later. However, home buying is always an individual decision. Your financial situation and the housing market in your area will determine whether you buy or not.
Here are some numbers one should look at when deciding to buy now or wait. Click here to view the recording