Rising Interest Rates - What You Need to Know
Mortgage rates have been rising after falling steadily over the winter. Some potential homebuyers are concerned by the fact that higher mortgage rates combined with higher prices has made it more difficult to afford homes. If you are considering buying a home in the next year, you might be wondering if it is the right time or if you should wait until rates drop.
Inflation is the main reason for the recent rate increase. Joel Kan, Vice President of the Mortgage Bankers Association (MBA), is Deputy Chief Economics Officer. He says:
“Mortgage rates increased across the board last week, pushed higher by market expectations that inflation will persist, thus requiring the Federal Reserve to keep monetary policy restrictive for a longer time.”
Freddie Mac reported that the latest weekly average fixed rate for 30-year mortgages was 6.5%. This is the third consecutive week that rates have increased, and it puts them at their highest level this year (see graph below).
Advice for Home Shoppers
You might want to reconsider if you are considering putting off your home search due to rising rates. You may be able to purchase the home that you have been looking for. According to the MBA, mortgage applications fell by 13.3% in one week. This suggests that some potential homebuyers are rethinking their search for a home.
What does this mean for you? You'll be more likely to face less competition from other buyers when searching for a home. This is a welcome relief in a market with so few homes available.
In the past few weeks, mortgage rates rose. However, this doesn't mean that you shouldn't be pursuing your home-buying plans. If you are looking to get the best buyer competition, it might be the reverse. Let's get in touch today to discuss the options available in your local market.
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