Welcome back to my real estate blog! Lately I’ve been
getting a lot of questions from both buyers and sellers about how the rising
interest rates will affect them.
Buyers are going to take a harder hit than sellers. Most
buyers have been looking at a base interest rate of 2-3% over the past few
months. Rates have increased to 4-5% now. This is a huge impact mentally;
financially it’s not that big of an impact. You are only going up one point.
To explain financially, a payment for a typical mortgage
product six months ago was just around $1,700, now with the increase in rate
it’s just above $2,000. That’s a $300 hit on your income. This will cause
affordability problems for some which will lessen then buyers’ pool.
My advice to buyers is to get the house you want at the
price you want, but with a fixed rate. I would not recommend getting a variable
interest rate mortgage.
The rise in interest rates won’t affect sellers as much.
You may think that now your home isn’t worth as much, but the reason for that
is because appraisers are valuing your home at less. The reason for this is
because of the dramatic changes in the market. With multiple offers, I am able
to get you more than the appraisal value.
If you have questions about how the interest rates will
affect you, give me a call 419.874.118
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