Hey - I hope you are doing well. For this week’s video I want to discuss interest rates. Unfortunately, rates are on the rise again. Please see the article below for more details but the jobs report and inflation data came in higher than expected and this has caused rates to go up. We are seeing rates in the mid to high 6’s right now and can probably expect this to continue until we get updated numbers showing inflation going down.
If you are currently buying a home, what does this mean for you? First, always go back to your budget. Make sure you get updated numbers from your lender to confirm the purchase price you are looking at still fits within your budget. If it doesn’t, you need to consider lowering your purchase price or looking at an option like a 2/1 interest rate buy down to lower your payment. Once you have confirmed the numbers with your lender, call your real estate agent to update them if your price point has changed.
Second, the silver lining to rates going up is it is going to help with our inventory issues. I have mentioned in several of my videos that outside of rates, inventory is our biggest issue. Most of our buyers are having to compete with 3 – 5 other buyers when they are making an offer. This makes the price of the home climb and makes it harder to win the contract. With rates going up, there should be less competition.
I do know this. If everyone waits for rates to drop, then we will back in the same scenario as 2020 and 2021 where you had to compete with 10+ offers and pay $50k to $100k over listing price to win the home. So, if you are in a position where you can still afford to buy the home you want, then you should be able to get a better deal on the home and refinance once rates come back down.
Cornerstone Mortgage Group
Georgia Residential Mortgage Licensee: 21412 • Company NMLS: 147913 • Individual NMLS: 147938