Is now the right time to buy a house with mortgage rates so high
Interest rates for home mortgages are going through the roof right now. They’ve gone up like 2% in the last month. It is a big deal, but do we need to panic? Also, what does this mean for the broader real estate market? What does it mean if you’re looking to buy a house? In this post, I’m going to answer these questions. Let’s dive in!
If you’re looking to buy a home, what does this mean for you?
The first thing I’d consider is that interest rates are still historically very good. Sure, you could wait for them to go down a bit, but the thing is that houses are also appreciating like crazy right now — like 2% a month, which is insane!If you go ahead and buy that house you’re looking at, you’re going to enjoy all that appreciation instead of getting swallowed by it. So, there’s more to consider than just interest rates when it comes to buying a house. Plus, if interest rates go down, you can refinance. So, I don’t think there’s much of a point in waiting right now because appreciation is insane and if interest rates go down you can always refinance.
The other part to consider is that, whether or not interest rates are going up or down right now, house prices and rents are going up. You don’t want to bet on the potential of a lower interest rate only to get swallowed by rent and price increases while waiting. My recommendation is to take the sure thing, ride the interest and wait for rates to go down, then refinance.
How do increasing rates impact the broader real estate market?
First things first, buyers are still going to buy houses. There are still plenty of buyers in the market who want to buy. The real problem with the real estate market right now, however, lies in a lack of supply. Interest rates don’t really change that much to this endl and, if it does, it actually makes supply worse in a lot of ways because if you sell a home you’re going to need somewhere to go. You’re going to need to buy another house. And if you have a beautiful interest rate, do you really want to sell your house and go and experience the bloodbath that is the current real estate market? Probably not.
So, I think it’s very unlikely that these interest rates, even if they get really, really high, are going to cause some huge market turn. What we will start to see, however, is that, slowly, the market will begin to become more balanced. That’s already happening just a little bit. It’s still insane, but it’s getting a little less insane every day.
The good news here is that I don’t think rising interest rates aren’t really going to cause some big catastrophe. If you’re looking to buy a house, you should and could still buy a house. The bad news is that you might end up buying something a little less exciting than you could have a month ago for the same money. But I wouldn’t worry too much because you can always refinance down the road.
I hope this helps you have some clarity around this decision and that you’ve learned a little bit more about what’s currently going on in the real estate market. Please do reach out. If you want to find out what today’s current interest rates feel free to give us a call at 602-833-0547. We’re happy to help you out with that and any other real estate questions you might have right now. We’d love to help you out with that and get you set up with a custom list of all the properties that we have for sale. We’ve even got a bunch of off market properties in all the markets we work in that are not available anywhere else.