Still holding off your home search for warmer weather? It might be time to grab your coat instead and get your search started sooner. Mortgage rates have been steadily rising since the start of the year and here in late January, they hit a four year high.
Following positive economic signs, mortgage rates are on their way up. Last week, CNBC reports, rates were sitting at 4.28 percent for 30-year fixed, but this week some lenders will have 4.5% as their best cast scenario with the 30-year fixed quotes.
4.5% is still a great rate compared to historical trends, but waiting to purchase while home prices are rising along with mortgage rates might not be the best strategy.
“Today is one more reason for Realtors and buyers to move up their spring schedule,” said Chris Kopec, a mortgage loan consultant at Chicago-based Lakeside Bank.
The inventory shortage in Loudoun is restricting a lot of options and movement for buyers, but that doesn’t have to be the case for you. You need an agent who is ready to help you understand the market and make the right moves to meet your home goals. Same goes for sellers as those buyers they want to find their home may see their own purchasing power diminished by these rising rates.
Here is a simple calculation to keep in mind when considering your buying power and the impact of rates. If mortgage rates go up 1 point (4% up to 5%) then a buyer would need home prices to go down 10% to have roughly the same monthly payment. The chances of us seeing another half a point increase? Not impossible. The chances of home prices dropping 10%? Not likely.
Ready to get ahead of the curve of spring buyer rush and lock in these current 30-year fixed rates before there’s another increase? Give me a call and I’ll connect you with several great lenders to get you started.