In case you haven’t heard, the Federal Reserve increased interest rates last December and are planning an aggressive approach in 2017. Since the election, rates have risen in total by about 0.75%, and we can expect them to rise further by a full percentage point by mid-summer.
What does that mean for you as a buyer or seller?
If you’re a buyer, the same home that you could’ve purchased last year will now cost you more. The monthly payment for a $500,000 house, for example, will now cost $200 to $300 more. If you’re a seller, your buyer pool is shrinking because not as many homes are affordable to them anymore.
The good news is that we still have historically low inventory and interest rates. There are also still plenty of buyers out there looking to buy. We know this because, despite this uptick in rates, we still get a lot of inquiries. Buyers even have a bit more wiggle room to negotiate than they would have had in the past because there aren’t as many multiple offer situations happening.
If you’re planning on buying, do it now while you have a much better chance to lock in a low rate. If you’re a seller, you should also act now before your buyer pool shrinks even further thanks to those rising rates.
If you have any questions or are interested in buying or selling soon, feel free to pick up the phone and give me a call. I look forward to helping you!