INTEREST RATES RISING? WHAT'S ALREADY HAPPENED AND WHAT'S TO COME
INTEREST RATE PREDICTIONS
If you're purchasing a home and getting financing from a bank or a lending institution, an appraisal is something that will be mandatory (mostly) in order to get financed. What does this mean for a buyer? I explain:
WHAT'S ALREADY HAPPENED THIS YEAR?
At the beginning of the year, interest rates were floating around 4%.
Now, they're in the mid-high 4's
- To put this in perspective, if you've been "waiting" you've lost a lot of purchasing power. With a .8% interest rate rise, that $500,000 house is now $540,000. You've lost $40,000 in purchasing power. Couple that with appreciation, you've lost out on a lot of money as a buyer.
WHAT'S PROJECTED FOR THE REST OF THE YEAR?
- Interest rates are slated to continue to rise into the high 4%'s and possibly low 5%'s by the end of the year.
- By next year, it'll for sure be in the low 5%'s.
WHAT DOES THIS MEAN IF I'M A BUYER?
- If you're a buyer, you're ready, willing, and able to purchase a home - my suggestion is to put a sense of urgency on your pre-approval and pre-underwriting.
- If you're waiting, you could be missing out on a lot of money due to the rising interest rates AND fast appreciation we're receiving in our market.