The Federal Reserve continues to aggressively hike interest rates to combat inflation
As the Federal Reserve continues to aggressively hike interest rates to combat inflation home buyers and sellers are both feeling the pain. According to data released by Freddie Mac on Thursday September 8th, interest rates on a 30 year fixed mortgage averages 5.89%, that’s up 23 basis points from the previous week.
It’s not all bad news, this inflationary economic environment has affected many consumers across all industry sectors and buying categories, the upside is that home buyers may have a better opportunity to negotiate the purchase of their next home at more normalized home prices.
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Home sales have been rising at a record-breaking pace all throughout last year (2021) and much into the first quarter of 2022, however that is all changing thanks to rising interest rates. Home sellers are more inclined to accept offers at lower than listing prices in order to appease pre-approved home buyers and lenders who are increasingly appraising properties more conservatively according to the current environment.
If you’re considering purchasing a home you would be wise to take a few of these tips into consideration:
- Get Pre-Approved – Understand your financial obligations and budgeting requirements, speak with your lender about getting pre-approved for a home loan. If you don’t have a preferred lender, get in touch with your Realtor for recommendations on local mortgage lenders.
- Find a REALTOR – Get in touch with an experienced Realtor in your area that can help you search for a property within your pre-approved budget, and negotiate a purchase agreement that works best for your finances.
- Down payment – Plan on 20%-30% down payment to decrease your mortgage loan financing debt and consider buying points to bring down your overall mortgage interest payments over the life of the loan.
- Don’t Splurge – Find a property that will suite your needs, don’t overspend on an extravagant property that will end up costing you in maintenance, repairs, and high property taxes in the long run. We all want that large house on the hill, but sometimes we just have to reign in our expectations.
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