This is how interest rates are affecting our housing market.
Many experts are predicting that interest rates will begin to rise in the near future. We did see a decrease in June, but this was only due to disappointing employment reports, rising inflation, and news from the Federal Reserve that short-term interest rates could be rising.
Currently, rates are around 3%, and they’re expected to remain in this range until the end of summer. Jumbo loans (amounts over $548,000) are about the same, but you could see sub-3% rates if you put down a large down payment.
Even if interest rates rise, though, they’re still at the lowest levels we’ve ever seen. Buyers are taking advantage of these rates because they’re now able to borrow more money, allowing them to afford bigger and better homes. However, this is all taking place during an extremely competitive seller’s market that’s low on home inventory.
Here’s what I tell my buyers: You live in your monthly payment—not the total cost of your home. If you’re selling, any change in interest rates will impact what a buyer can pay for your home. This impact will be even more profound in lower, more affordable price ranges.
It’s risky to wait and hope rates will drop or remain the same. Experts predict that rates will gradually increase throughout the second half of 2021, so it’s better to act sooner rather than later.
If you’re thinking about buying, selling, or refinancing a home, now’s a perfect time to start the process. If you need help with anything related to real estate or would like more information, feel free to reach out to me. I look forward to hearing from you soon.
