Are Higher Mortgage Rates Here To Stay?
Recently, mortgage rates have been experiencing an upward trend, grabbing the attention of the media. In fact, if you've been keeping an eye on the headlines, you might have noticed that rates have reached their highest point in over two decades, as indicated in the graph below:
This development may feel somewhat unsettling if you're contemplating a real estate move. If you're pondering whether to postpone your plans or proceed, here's what you need to understand.
How Higher Mortgage Rates Affect You
It's undeniable that current mortgage rates are higher compared to recent years. When rates rise, they impact the overall affordability of homes. Here's how it works: as rates increase, the cost of borrowing money to purchase a home also rises. This translates into higher monthly mortgage payments for your future home loan.
The Urban Institute sheds light on how this is affecting both buyers and sellers at the moment:
"When mortgage rates go up, monthly housing payments on new purchases also increase. For potential buyers, increased monthly payments can reduce the availability of affordable homes. Furthermore, higher interest rates result in fewer homes on the market, as existing homeowners are motivated to hold onto their homes to retain their low interest rates."
In essence, some individuals are contemplating delaying their plans due to the current state of mortgage rates. But what you really want to know is whether this is a sound strategy.
Where Will Mortgage Rates Go from Here?
If you're eagerly awaiting a drop in mortgage rates, you're not alone. Many people are in the same boat, hoping for a change. However, here's the reality: no one can predict when that drop will occur, not even the experts. Forecasts may suggest that rates will decrease in the coming months, but recent data indicates a rise in rates. This discrepancy underscores the unpredictability of mortgage rate projections.
The best advice for your situation is simple: don't attempt to control what you can't control. This includes trying to time the market or make educated guesses about future mortgage rate trends. As CBS News aptly states:
"If you're in the market for a new home, experts typically recommend focusing your search on finding the right home purchase rather than worrying about the interest rate environment."
Instead, concentrate on assembling a team of skilled professionals, including a reliable lender and a knowledgeable real estate agent. They can provide you with insights into the market's dynamics and how they relate to your specific circumstances. Whether you need to relocate for a job change, want to be closer to family, or are undergoing another significant life transition, the right team can help you achieve your goals, even in the current market conditions.
When it comes to making your move, the best advice is this: refrain from attempting to control the uncontrollable, particularly mortgage rates. Even the most seasoned experts cannot accurately predict their future trajectory. Instead, focus on assembling a team of trustworthy professionals who can keep you informed and guide you through the process. When you're prepared to take the next step, let's connect to get the ball rolling.