What Buyers Should Know About Rising Rates
Do rising rates spell doom for potential buyers in today’s market?
The Federal Reserve raised the interest rate by 0.75% recently, which is the largest increase in decades. Let’s unpack what that means for you.
First, the 30-year fixed interest rate for mortgages depends on 10-year Treasury bonds—not the Fed’s rate. In fact, we saw a slight dip in interest rates after the recent Fed hike. Of course, the 0.75% increase wasn’t enough to stabilize inflation or rising home prices, so the mortgage interest rates went up again.
"When rates decrease again, you’ll be able to refinance your loan to a lower rate."
In the grand scheme of things, a 6% rate isn’t all that bad. Granted, it’s not as it was earlier this year, and you might have to look at a lower price range if you want to buy, but 6% is still a low historically low rate. Keep in mind that rates, like the housing market in general, ebb and flow. When they decrease again, you’ll be able to refinance your loan to a lower rate.
If you’re thinking about buying a home, speak with your lender to find out what you qualify for and learn about your options. Don’t hesitate to give me a call or send me an email if you have any questions about buying or selling a home. I’d love to hear from you.