Check In on Mortgage Interest Rates

For anyone thinking about buying a home in the next year, they are most likely watching mortgage interest rates. And they are probably not happy with where rates are. On Friday, I quoted 7% for a 30-year fixed rate for the first time in over a year. The Federal Reserve meets this Wednesday, and the majority of investors anticipate an increase in the federal funds rate. As we have said many times in our newsletter, that expected increase in short-term rates has already been taken into account in longer-term rates such as mortgages.

However, the counterbalance to the higher rates is a slower, more reasonable housing market. In the last week, we had four clients go under contract. Two were able to buy the house below list price, one at list price, and one escalated over list price. However, that house had clearly been priced well below market, so they probably paid a little under market in the end. Potential homeowners can take a few days to decide whether they want to make an offer. They can bring family and friends over to see the house and help them make an informed decision. They can take the time to do a thorough market analysis with their realtor. In other words, the homebuying process is much less frenzied and heated than when interest rates were lower.

We always say that you date the rate but marry the price! So, even with higher interest rates, it may be time to consider buying. If you want to explore this option, you are welcome to come to our “Homebuying 101” seminar on October 5, or contact us to set up a meeting to discuss your options.