To the benefit of Glendale home buyers, the real estate market experienced record low mortgage interest rates over the past several years. Many people took advantage of buying during that time. Some homeowners were stuck in their house, waiting for it to sell before they could buy a new one and take advantage of the rates.
This means that are plenty of Glendale home buyers in the market this year. But they are finding that the interest rates are on the rise.
If you are one of those Glendale home buyers, here are some things you should know about buying in this market.
While there has been a lot of news about mortgage rates increasing, it’s important to note that they are still at incredibly low rates. The Fed set the rate at 1.5 percent for 2017 and has intentions of increasing it up to 3 percent by 2020. The good news is you still have time to take advantage of these low rates.
Historically, what happens as interest rates increase is the price of homes spike up a little as well. Buyers begin to flood the market to find a house before the rates go up any higher. It is a good idea to take advantage of these rates if you are interested in buying, but don’t rush the decision just because of the rates.
Buying a house is a big purchase. Glendale home buyers should not rush the process until you are ready.
If you are obtaining a mortgage when buying a house, the interest rate plays a role in how much house you are able to afford. For example, as the interest rate goes up, it eats into the monthly amount that you are going to be paying, which reduces the total sale price that you are able to pay for the house in the first place.
Because so many people are trying to buy houses right now, there is a not enough inventory on the market. That means the cost of homes has seen substantial increases.
This isn’t expected to last forever, though. As interest rates continue to increase, the cost of homes will begin to decrease.
If you are able to afford the higher interest rate, you will have less buyers in the market, which means you should be able to pay less for a house.
As the interest rates continue to rise, there is a very slight chance that the additional cost could bump Glendale home buyers out of your approval limit. If this happens, you can look at making a larger down payment to reduce the amount that you need to finance. Glendale home buyers can also consider working with a different lender that might have a lower rate to make up the difference.
It is true that rates are on the rise, but you don’t need to panic because of it. The real estate market has gone up and down for years, and will continue to do the same. Give yourself the chance to make a decision you are comfortable with for the long haul.