About Those Interest Rates…
First high gas prices… now a spike in interest rates… oh my!
What does the current economy mean for your ability to buy a home?
The Fed raised interest rates by a whopping 3/4 of a percentage point last week, which is the highest rate jump we’ve seen in decades. The spike is aimed at addressing the growing inflation our country faces. So, what does this mean for the real estate market?
The market is expected to slow, as more potential buyers struggle to afford homes at their current prices, and at higher interest rates. Higher interest rates mean many buyers will be priced out of the market, which will likely lead to more inventory of homes for sale on the market.
It’s no secret that owning real estate is one of the best investment’s an individual can make. Homeownership is one of the leading determinants of future financial stability. If you’re able to afford a home, it’s always better to make that purchase than to continue paying rent, since rent prices are usually not fixed and can be raised every year without any limitations. In 2021, rent prices rose on average over 17% across the nation, and they continue to rise in 2022.
If you’re still renting, but have been wrestling with the idea of taking a leap into homeownership… now is the time to do it! Interest rates are expected to continue going up, and home values are not expected to come down anytime soon. Don’t wait to get priced out of the market, in hopes that rates will eventually come back down again, since this is not expected to happen again for a very long time.
The good news is, a lot of people are qualified for a home and just don’t realize it! You do not have to have 20% down to qualify for a loan, unlike what you may have been told. FHA loans start as low as 3.5% down, and Conventional loans start as low as 3% down. If you have steady income and a moderate debt/income ratio, you will likely qualify for one of these loans and can start working towards building your wealth.
If you are unable to get approved for a loan today… don’t give up! It can be so tempting to get discouraged by all the headlines and struggle to stay motivated. But every small action you take today to raise your credit, put a little money aside, etc. is going to pay off in the long run, and you too can purchase a home one day when the time is right.
If you’d like to see if you qualify for a loan today and learn more about your options, fill out the information on the link below and we’ll chat!