Just not so long ago, I had blogged about interest rates on the rise. Well, they just went up again!! Just last year, mortgage rates were at an all-time low. In fact, "Mortgage rates have not been this high since the start of the pandemic in early 2020" per CNBC. Clearly, 2022 is going to be different. In other words, if you had your eye on a home but hadn't locked in a rate just yet, that home just got a lot more expensive. CNBC gives us more details:
The average rate on the popular 30-year mortgage hit 3.64% on Monday morning, after rising sharply last week, according to Mortgage News Daily. On Friday, the rate was 3.5%, and last Monday it was 3.29%.
For a median-priced home, currently about $350,000, buyers putting down 20% will now see a monthly payment $125 higher than they would have just three weeks ago. For those using low down payment loans, the monthly increase will be even larger.
In a matter of just three weeks, mortgage rates have gone up significantly. Buyer's, who are already at their wit's end trying to compete for a home with very little inventory, are now facing higher mortgage rates that lead to higher amounts on their mortgage payments
Mortgage rates have not been this high since the start of the pandemic in early 2020. Rates then spiked briefly, for about three weeks, and then continued their pre-pandemic fall, hitting more than a dozen record lows by the start of winter. This coincided with a massive jump in housing demand due to the pandemic, causing homebuying to heat up fast.
In 2021, rates moved within a narrow margin, but stayed relatively low, further fueling demand and rising home prices. The only thing holding buyers back was chronic low supply.
At the pandemic's start, we saw historically low interest rates and a low inventory of houses. Now buyers are facing not only continuation of lack of inventory but clearly much higher interest rates
It's clear that buyers can expect similar trends to continue that we’ve seen since the start of 2020. Things like very low inventory, a seller's market, bidding wars, and a very quick turnaround
I expect we will see bidding wars on many homes, particularly in the spring and summer. This can be impetuous for buyers to continue or start to consider moving further out where there is less competition.
In a previous blog (above here), I expressed how I felt about more and more people choosing to move further out of town to get more land and more house for their money. And with interest rates climbing, there is no better time than now to consider moving further.
Further, it is less competitive in the suburbs, with fewer buyers competing than in the cities. More buyers most certainly drive up the house prices, tag on high-interest rates, and you may likely not be able to afford the house you want any longer. So why stay in the city? The silver lining during the pandemic has allowed many people to work at home, which in return has allowed more people to move to the suburbs. We see signs from many tech companies allowing remote work (at least in part), which will be here to stay. By not having to drive into the city as often, residents have more freedom to buy more house, more land and enjoy the space that municipalities farther out in the county offer.
No better time than now to consider moving further out! Consider Monroe, where this community grows more and more each year!
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