Let’s Talk Interest Rates!
Interest rates have been the talk of the town. And it’s no wonder with how quickly they have risen and the daily fluctuations which could be as high as 3/4 of a point in one day. Rates are currently hovering in the mid 5’s. That sounds shockingly high! In reality, it’s not. Take a look at the chart below (courtesy of Eric Swenson with Nova Home Loans). Rates have historically been even higher than they are now with the exception of the most recent few years. We all got so accustomed to seeing these crazy low rates that a “normal” rate seems high.
Now don’t get me wrong. In comparison to the upper 2’s and low 3’s that we saw over the last few years, a rate in the mid 5’s definitely changes your buying power. You just need to be realistic for what type of home you can get with the current buying power.
One thing to keep in mind: You Marry the Home but you only Date the Rate!
While you may be getting a 30-year mortgage, it is extremely rare for a homeowner to hold onto a mortgage (or the home) for that long. Buy the home now and when rates come down, you take advantage of that and refinance. Or, when the market turns back into a seller’s market (which it always does at some point), you sell the home. The average homeowner moves every 5 years. The likelihood of you keeping that same mortgage for all 30 years is pretty slim. So don’t let today’s rates scare you.
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