The housing market is in a state of flux and buyers are feeling the squeeze. After a strong year for home sales, the prospect of rising mortgage rates has cast a ripple of concern across the real estate landscape.
With rates potentially rising by up to 2–4%, homebuyers are having to consider the financial implications of locking in such a hefty loan. Mortgage rates have now increased from below 4% in May 2020 to over 4.5%, meaning anyone considering a mortgage today must do their research.
It is no secret that housing costs are on the rise. Average sale prices for existing single-family homes have increased in all four major U.S. regions over the past year. This increase, coupled with rising mortgage rates, means buyers must do thorough financial calculations before diving into an agreement.
The good news is that mortgage rates remain lower than past years, creating a unique buying opportunity for those already in the market for a home. Homebuyers should be sure to compare mortgage rates from a variety of lenders to get the most favorable rate.
For those yet to enter the market, be sure to consider housing trends within your area. The changes in mortgage rates and home values are likely dependent on the area and should be factored into any financial decision.
The recent news of inflated mortgage rates does not spell the end for prospective homebuyers. With shopping around and careful financial considerations, buyers can find success in this current market climate. All in all, stay informed, do your homework, and make sure to weigh all potential risks when it comes to hefty mortgage rates.