The past two years have given us historically low interest rates, and even with housing inventory rising in price, the low rates have provided many buyers with a near once in a lifetime option to purchase the home of their dreams, while securing the historically low rates. Many people argue that even though the rates are low, the higher home prices aren’t worth the purchase, however, with rates so low, the amount spent over the life of the loan could surprisingly be far less than if you’d purchased the home for less with a higher interest rate.
In addition to many buyers jumping on the opportunity to purchase real estate with low interest rates, many homeowners also took advantage of the low rates by refinancing their home loans. While many people were able to take advantage of the low rates that the past few years have provided, unfortunately it looks as if rates are on the rise, simply meaning, now is a great time to buy.
It’s been projected that interest rates will increase 3 times in 2022, which will not only make purchasing a home more expensive but will also likely decrease the demand that the current real estate market is experiencing. While the increase in interest rates may not be hefty enough to switch the market from a seller’s market to a buyer’s market, the rate increases are projected to help level the real estate market drastically, allowing for inventory to remain on the market slightly longer, and limit the bidding wars as well as overpriced homes, allowing for more buyers to have a chance to finally purchase a house and find a home.
It’s important to remember that even though interest rates are projected to rise, many home loans will remain affordable for many buyers. The projected increases ensure that rates won’t be anywhere near the historic highs of more than 16% back in 1981 and are projected to remain well below 5% for those with good credit. If you haven’t purchased a home in the last few years or refinanced your home loan, now might be the time to find the home of your dreams or refinance your home loan before interest rates increase.
If you’re currently searching for a new home, are ready to sell your home and need a qualified seller’s agent to assist you, or if you have any further questions regarding New York Real Estate or the Village of Medina, please feel free to contact our office at any time.