If you are reading this then it is a safe assumption that you have been aware of the news surrounding the rising interest rates in 2022. Mortgage interest rates are a major factor in home ownership and affordability. As of this week, mortgage interest rates jumped significantly and they currently sit around the 6% range. So far in 2022, we have experienced an unparalleled historical increase with mortgage interest rates jumping around 2%.
Predictions are dangerous to make, but it seems pretty safe to say that the good ol’ days of 3% or 4% interest rates are long gone, unfortunately. This leaves many buyers and sellers asking the question…
“Now what?”
The biggest questions and concerns will be around overall affordability for buyers now that the interest rates and cost of borrowing/owning are going to be higher than what it was just a short period ago. Monthly mortgage payments are going to be higher than what we have grown accustomed to in the last few years when the rates were significantly lower.
Here is the reality of the housing market… at any given time, and during any given good or bad market conditions, we as people will have needs and wants around moving and buying or selling a home. The higher interest rates will certainly affect overall buyer demand, but let's not be too doom and gloom about what’s next!
This optimism is offered because if you are needing to buy a home, or even just want to buy a home, the process remains the same as what it was 6 months ago or 6 years ago. Potential buyers need to start the process by determining what they are comfortable with financially and then have that dictate the conditions of how the buying process will play out from there. Buyers should determine what monthly payment and how much of a down payment they can personally afford, and then see what lending options they have and what price range they should target based on the current interest rate. From there, you can see if that price range you qualify for and/or can afford will suit your needs and wants for a home-based on the available inventory in the location you are looking in.
Simply put, let your financial requirements for what you can afford dictate the process of buying a home, not the news of rising interest rates.
