What’s a home buyer to do when interest rates rise? It’s a question many are considering as the market recovers from the long period of historically low rates following the financial crisis of 2008. With rates rising, buyers worry about getting a bad deal, and what that could mean for long-term financial stability.
But that worry shouldn’t keep buyers from the financial potential and long term investment that comes with owning a home. Remember that the best time and place to buy a house is personal to every buyer, and doesn’t always follow the ebb and flow of the housing market. Knowing what to expect and control is half the battle, and buying what you can afford in an area you like is the key to stability regardless of the market.
That said, there’s some good news if you’re looking to buy a home:
Experts predict an improved housing market in the near future.
HomeStreet Bank Senior Vice President Andy McDonough and a survey from the National Association of Realtors predict that the housing market will show improvement over the next 6 months. That’s in part because the inventory in an area often determines a home’s value, and the more inventory there is means prices are likely to go down. If rates continue to rise (as experts predict), there will eventually be more homes and fewer buyers.
Unemployment remains low, and that should inspire confidence.
Because of the current historically low unemployment numbers, some economists predict that “30-year mortgage rates should rise only modestly.” Consider what you can safely afford, and remember that refinancing after you have some equity in your home is always an option when interest rates drop again.
In the end, every homeowner will have to decide what they value most in the place they live. For many, owning a home is worth the ups and downs of the market, both for the sense of community it inspires and because of the security that comes with investing in something tangible.
If you’re wondering what your options are when it comes to a home loan, let us walk you through it. We’re here to help. Contact me today.