Mortgage rates have been back on the rise recently and that is getting a lot of attention from the press. If you have been following the headlines, you may have even seen rates recently reached their highest level in over two decades (see graph below):
That can feel like a little bit of a gut punch if you are thinking about making a move. If you are wondering whether or not you should delay your plans, here is what you really need to know.
How Higher Mortgage Rates Impact You
There is no denying mortgage rates are higher right now than they were in recent years. And, when rates are up, that affects overall home affordability. It works like this. The higher the rate, the more expensive it is to borrow money when you buy a home. That is because, as rates trend up, your monthly mortgage payment for your future home loan also increases.
Urban Institute explains how this is impacting buyers and sellers right now:
“When mortgage rates go up, monthly housing payments on new purchases also increase. For potential buyers, increased monthly payments can reduce the share of available affordable homes . . . Additionally, higher interest rates mean fewer homes on the market, as existing homeowners have an incentive to hold on to their home to keep their low interest rate.”
Basically, some people are deciding to put their plans on hold because of where mortgage rates are right now. But what you want to know is: is that a good strategy?
Where Will Mortgage Rates Go from Here?
If you are eager for mortgage rates to drop, you are not alone. A lot of people are waiting for that to happen. But here is the thing. No one knows when it will. Even the experts can’t say with certainty what is going to happen next.
Forecasts project rates will fall in the months ahead, but what the latest data says is that rates have been climbing lately. This disconnect shows just how tricky mortgage rates are to project.
The best advice for your move is this: don’t try to control what you can’t control. This includes trying to time the market or guess what the future holds for mortgage rates. As CBS News states:
“If you're in the market for a new home, experts typically recommend focusing your search on the right home purchase — not the interest rate environment.”
Instead, work on building a team of skilled professionals, including a trusted lender and real estate agent, who can explain what is happening in the market and what it means for you. If you need to move because you are changing jobs, want to be closer to family, or are in the middle of another big life change, the right team can help you achieve your goal, even now.
Bottom Line
The best advice for your move is: don’t try to control what you can’t control – especially mortgage rates. Even the experts can’t say for certain where they will go from here. Instead, focus on building a team of trusted professionals who can keep you informed.
When you are ready to get the process started, let’s connect.
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