Mortgage Interest Rates To Rise. Home Buyers Should Act Now.
All good things come to an end – even low mortgage interest rates. They have been steadily rising and are poised to climb even higher this year. When they do, the cost of buying a home will rise as well. This could make the challenges of today’s seller’s market even worse for some prospective purchasers—particularly first-time buyers.
After reaching historic lows, average mortgage rates are creeping higher. They hit an average 4.43% for 30-year, fixed-rate loans as of March 1, according to Freddie Mac data. This was the highest they have been in more than 4 years. The new Fed Chairman, Jerome H. Powell, said they are expected to go up even more after the Federal Reserve bumps the rates up in 0.25% increments, at least three times this coming year, beginning this month. The rate hike is not going to stop most buyers’ decision to purchase a home. Instead, it will create a sense of urgency.
Even a fraction of a percentage point rise quickly adds up. On a $300,000 house with a 30-year fixed mortgage and 20% down payment, the difference between 4% and 5% is $142 a month. That is more than $51,000 during the life of the mortgage. Buyers thought they could wait forever to buy because rates were going to stay low forever. They’re starting to realize if they’re going to buy they should probably buy now.
First-time homebuyers have the most to fear from rising mortgages. Overall, about 44% of prospective homebuyers say they will have to settle for a cheaper home. In addition, despite the increases, the housing shortage and soaring prices are only likely to get worse. That is because of the abundance of buyers. Many buyers held off purchasing during the recession because they were worried about their job stability or could not afford to buy. Now with a stronger economy, they are entering the market in droves.
When buying or selling a home in today’s market, you need a market-savvy Realtor who has experience not only in today’s market but who also has a team of Professional Real Estate Consultants to guide you through the process of everything that needs to be done. By hiring me and my team of Professional Real Estate Consultants to help you, you will receive expert advice from people who are knowledgeable, experienced, and who will truly listen to your Real Estate needs. Our clients have been heard to say, “Susan and her team are compassionate and caring about what they do. They have helped us when no one else could.” As your trusted Real Estate Consultants, our team meets with you and offers you the guidance and the information you need to make every facet of your transition as smooth and comfortable as possible. As full-time Consultants, we are able to ‘work the market’ for you, keeping you up-to-date with conditions as they impact the market. Let us help you ‘Make A House Your Home.” Call/text Susan Compagner at 616.836.2603, [email protected], www.SusanCompagner.com.
Some of the information in this report was taken from an article taken from a REALTOR®.com written by Chris Parker.
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