Rates have reached levels not seen in over a decade, and it happened fast. Here's a few things you should know, both good and bad, now that we are looking at higher mortgage rates.
Rates are not likely to go significantly lower anytime soon.
Rates move from day-to-day, and sometimes can even change during the day, so we are going to see some days where rates are lower than other days. However, we are not likely to see significant rate drops while we are still dealing with high inflation and the Fed is expected to continue raising rates into February and hold them there. It would be a mistake to pause your house hunting to wait for rates to come back down.
Higher rates are helping stabilize home prices, and providing an opportunity to get a home without a bidding war.
For the first time in years, home inventory is actually starting to increase on the market and buyers are able to make an offer on a home that isn't lost in a sea of other offers. There are even situations now where you may be able to have the seller pay some closing costs or possibly help buy down your interest rates! Higher rates have pushed some buyers to the sidelines, and others are sitting out because they are scared.
We are not in a housing bubble.
Although we may see prices in some ranges and some geographic areas fall back a little from the recent highs, we are not in a bubble and housing values are not going to crash. I'd be glad to explain why if you want to hear more, but the short and simple answer is that there is a lot of home equity out there and people are well qualified to weather a storm, unlike the risky mortgages that were done in 2008. If home prices do drop back a bit we will see them rebound quickly when rates fall and demand picks up again.
If you're thinking about buying a home (and now is actually a great time to do so) , reach out to me so we can discuss if the higher rates affect your purchasing power, how much of a payment change you may see, and what options you have available.
If you have questions about the current housing market, want to learn more about buying or selling, or want to know about some of the great local events and happenings within the Foothill Communities, just reach out!