Today, I want to briefly discuss a topic that will be of great importance for homeowners for years to come: interest rates.
Many people don't realize how lucky we are to have rates as low as they currently are! Over the last few years, we've been within half a percent of all-time historic lows. This is not sustainable, and you certainly can't expect it to last for much longer. In fact, the Fed has hinted many times that they plan to raise rates in the near future. When they do, rates will likely rise to as high as 6%, if not more!
When I first got started in real estate, rates were around 8% and no one complained or even thought twice about it. Going further back, rates were as high as 16% in the 1980s, and there was no down-payment assistance! Obviously then, if rates rise to 6% it won't be the end of the world. However, those few points will greatly affect your affordability.
If you plan on making a purchase, you need to act soon! If interest rates rise even .5%, you lose 5% of your purchasing power! If you were shopping for a home for $300,000, now you can only afford a home for $285,000. Meanwhile, there's no sign that appreciation will slow down anytime soon, so you'll lose even more purchasing power! In short, now is the time to get more home for less money, period. Waiting is only going to cost you!
If you have any questions about where rates are heading, or if you need real estate assistance of any kind, don't hesitate to give me a call or shoot me an email. I would love to hear from you!