What Increasing Mortgage Rates Mean For Colorado Home Buyers?
You may have heard the news; interest rates are increasing. While it’s true that this new rate hike will cause mortgage rates to increase, what the news is not telling you is that mortgage rates are still low, making it a good time to borrow money. So, if you’ve been trying to buy a home of your own, don’t let this news discourage you. Even though rates are on the move, getting into a home of your own is still a good investment and something you will be glad you did. But, since we know rates are inching up, it’s best to buy your home or vacation property sooner rather than later. Here’s some more information to help ease some of your fears.
There’s No Need To Panic
I’ve seen all the doom and gloom headlines about the real estate market. The truth is, there’s no need to panic, especially not about mortgage rates. Mortgage rates have been historically low, which has helped drive this surge in demand in the market, and even with this bump up, rates are still much lower than we are used to seeing. Just a few years ago, rates were 4.5%, and that seemed like a bargain!
How High Will Mortgage Rates Go?
We aren’t certain how high mortgage rates will go. Most experts predict they will not got above 4% in 2022. An article by Realtor.com predicts that we will see rates close to 3.9% for a 30-year mortgage by the end of the year. So, we aren’t expecting a huge spike that makes home buying completely unattainable.
If you are in the process of buying or refinancing a home, we are able to lock in a mortgage rate for a set number of days. This way, if rates increase before your transaction closes, you won’t be surprised by an increase in your monthly payment.
Is It A Good Time To Buy A Home?
We won’t get into the buying vs. renting debate; that’s a conversation for another time, but renting a home in most Colorado areas is more expensive than owning. Even with the rising costs associated with buying a home, it is still a good investment.
An article by Bankrate.com points out that regardless of interest rates, it is crucial to purchase a home that has a monthly payment within your budget. We can calculate what the home’s purchase price, taxes, insurance, and mortgage rate means for your monthly payment, and then you can base your home search on those numbers.
Let’s Get Moving!
While we don’t want you to panic about the increase in mortgage rates, if you’re thinking about buying a home or investment property, it would be a good idea to get moving as soon as possible. The cost of everything is getting higher, so buying a house now rather than waiting until later in the year will save you money.