Given that Interest rates are rising, can I still buy?
We've been told repeatedly in the last couple years that mortgage interest rates will increase. And although the rates have started to do just that, (they've risen twice so far in 2017 and projections are that they will continue their upswing throughout the year) there is no need to panic. despite the predictions of some that claim to be 'in the know' it's not doom and gloom nor is it the end of the good housing market! While you may need to re-adjust your expectations a bit regarding your own personal affordability due to the increases, rates are still as good as they've been in years! And although the interest rates have risen many would-be home buyers are asking what impact will this have on the housing market? Here is what the experts are saying:
“In 1984, 1994, 2000, and 2013, every time we have rate increases, we have increases in nominal home prices. We expect this to be more pronounced, as there is a big demand-and-supply gap at the present time.”
“The tightening labor market, rising wage growth, high levels of consumer confidence and a millennial generation with a pent-up demand for housing should allow the housing market to weather the storm of gradually rising interest rates.”
“Although we strongly believe that the housing supply-demand imbalance for single-family homes will continue to drive above-average home price appreciation, just as falling mortgage rates aided pricing power on the margin in recent months, we expect the opposite effect to become evident in the coming months. As such, we project year-end home price inflation of 4.8% for 2017 and 4.1% for 2018.”
“A modest increase in mortgage rates won’t have much of an effect on home purchases. A buyer may need to slightly re-evaluate which homes they can afford, but it’s not likely to make an impact on qualifying, in most cases.”
"Our survey data shows that mortgage rates would have to be significantly higher to have any meaningful impact. The house buying power that borrowers have, even with rates below five percent, still remains historically strong."
The information by the Experts listed above is provided courtesy of Keeping Current Matters.
While the experts may agree that it's still a good time to buy, the challenge today is availability and finding the home you'll love and making your best offer quickly! One of the best things you can do to put yourself in the best position to make a home purchase is to talk to a lender and get pre-approved before looking at homes! You need to be strategic about looking at the 'right' homes; meaning the ones you could actually buy.
Once that's done, be ready to look and make decisions quickly! Inventory is light and the the good homes go fast. BE READY!
If you need help knowing what to do to be prepared, give us a call and we'll be glad to help you along the path to your next home! We're looking forward to working with you and your family!