Fed Rate Increase Not Slowing Buyer Demand
The Fed increased interest rates last week in an attempt to control inflation. Even with this increase, buyer demand is still high, so it is important to understand the overall picture.
Small rises in interest rates do not have a big impact on monthly mortgage payments.
Even with the recent increases, rates remain at historical lows, and purchasing a home remains a great investment.
Tips from some of our recent buyers:
- "Put more money down to reduce the payment." Some borrowers are getting gifts from family or partnering with a family member so both have ownership. Others are transferring from their retirement account since a home is also a retirement asset and they can borrow from their account, usually with no penalty.
- "Stay in the game now." A home is the best hedge against inflation since housing prices increase with inflation.
- "Understand your options." Homeowners can refinance to a lower interest rate if rates come back down and their payment will not increase, as rental prices will continue to rise.
Tips from our loan officers:
- "Be prepared." Demand is high and competition is fierce. Be pre-approved and ready to bid over the asking amount.
- "Understand your loan." There are many variables that go into the types of loans each buyer can qualify for so it is important to understand the details of each option and how they affect you long term.
- "Remember you live in the payment, not the price." Yes, home prices have increased, however, homeownership builds more equity in the current market. The equity homeowners can build in 2022 due to price appreciation will probably be higher than their mortgage payment.
Our experienced loan officers are available 24/7 to answer your questions whether you are buying your first home, looking for a 2nd investment property, or want to find out about refinancing your current home. Give us a call, email, or text! Find your loan officer online at https://www.sdfunding.com/staff-roster/
* Specific loan program availability and requirements may vary. Please get in touch with the mortgage advisor for more information.