September 15, 2013
… When life hands you lemons… What about when life hands you mortgage rates higher than you expected?!
As I’ve watched the housing market this summer, I have noticed some big changes. We started the summer with record lows in mortgage rates meaning buyers were everywhere – eagerly looking to get into their dream home. They had their financing worked out and attacked the market with multiple offers everywhere. Houses sold quickly. The hope was that was going to last, but unfortunately good things do come to an end – at least when referring to low interest rates. As these summer months flew by, rates began to rise and those eager buyers began to worry if it really was the right time to buy?
Sharply rising rates cause uncertainty. When rates are low it enables qualified homebuyers to get financing and they get excited to start looking and purchasing. When rates begin to rise that translates to higher monthly payments which can really scare off potential buyers. They start to think, can I really afford to pay more a month on my mortgage? Should I just stay where I am? Should I just continue to rent?
The best thing to do is to not react emotionally to the rate changes. In reality, historically, rates are still very low. They will go up and down with the economy, but when the rates rise, don’t automatically assume a home purchase is now out of reach. Look at the numbers and do the math. Figure out if the extra per month in your mortgage payment is really going to be the deciding factor, or if you can realistically afford it. When that number reaches an unrealistic amount, you’ll know your decision.
If you are wondering if it is the right time to buy or sell in today’s market, please let me know. I am happy to sit down and analyze if the time is right for you!