How Mortgage Rate Changes Affects Buyers

As the COVID-19 pandemic continues to ease and the economy also starts to ramp back up you are likely to see changes in the mortgage rates. What effect will this have on your decision to jump into the housing market? Should you rush into it or just take a wait and see approach? It may be one of the main factors in your decision, although a lot of other things have to fall into place before you can move forward. How important though is the mortgage rate you get when deciding to buy a home? Should you worry if you are not ready and you keep seeing those rates go higher?

 

While we have seen historically low rates these past few months there was no way that they were going to last forever. The economy started to churn up more and more and this is causing movement among the average rates. People who are already homeowners and are looking to refinance may have lost their chance to take advantage of these super low rates but current rates are still lower than in past years. While the rates may be inching higher and the days of super low rates may be over they are not doing so in a quick pace at this time. 

 

Mortgage rates can fluctuate from week to week so home seekers need to be prepared financially to be flexible within their budget to accommodate such changes when looking for a home. To throw another wrench into a first time or even second time home buyers plan the amount of homes available are at all time lows as well. So acting fast when you see a property that you want and being flexible when it comes to financing is a good way to keep your foot in the door while bidding on a property. With stock being so low and the amount of buyers being high then you may be faced with a bidding war when it comes to finding a home. So best advice is to cover your bases when it comes to your mortgage lender and be prepared for changes.

 

Due to low inventory we have seen a rise in home prices and this may lead to a slow down of the market if the mortgage rates keep going higher. A higher rate plus a more expensive home may price people out of the market. On the other hand the change of some percentage points may not matter but the lack of inventory is the major impediment to the housing market being as robust as it could be. 

 

A lot of things go into the process of buying a home and how you manage to pay for the property is probably one of the most important. There is no guarantee how smoothly the process will go but with the help of a knowledgeable real estate agent is really the best way to make your way through it all. Head to our Agents page or Contact Us for more information about how to get started.