Rising Rates – What Does it Mean for You?

A common comment we have been hearing from buyers – “rates are going up…so I am waiting for home prices to come down”. So far over the first quarter of 2018 we haven’t seen these hopes come to fruition. Rather, both interest rates and home prices have continued to inch their way up. Mortgage rates are projected to continue to rise over the remainder of the year, possibly to 5.5%. While still relatively low, a rate of 5.5% versus today’s average rate of 4.5% significantly impacts purchasing power – whether home prices fall or not. This chart shows how much your payment increases as interest rates increase – and how much prices must drop if you are hoping that the drop in price will compensate for the raise in rates. In short, your first consideration should be rates – not holding out for a lower home price that may not come, as rates continue to rise. Take advantage of still low rates while you are able to; don’t miss out on additional purchasing power! If you have any questions please do not hesitate to contact us at anytime!