Interest rates are probably one of the most common reasons I hear buyers say they don’t want to purchase a property right now. But what are you waiting for?
The past few years during the pandemic, interest rates took a massive plummet to help keep the economy going during such a tough time. Seeing rates as low as 2.25% on a 30 year fixed mortgage wasn’t uncommon in 2020/2021! I know there are some who took full advantage of those interest rates and locked in when they could (thankfully my husband and I were able to!), but some buyers were holding out in hopes that home prices would drop.
2/3 years later, we’re still looking at a low inventory, keeping those home prices where they have been at. However, what has changed are the interest rates. Going from interest rates in the 2% to now having rates in the 5-6%, it can be a sticker shock for some!
But fear not...let’s break down interest rates over the last few decades.
Just as anything in the Real Estate Market, interest rates fluctuate depending on the economy, supply/demand, and plenty of other things. When you’re looking at the grand scheme of things, our current rates around 6% is below the average interest rate from 1976-2023! In fact, the average during this time is 7.68%!
So why do the interest rates today seem more daunting, even though they are lower than this average?
We did indeed hit historical lows in 2021, which many were so excited for. However, following up this year with a spike in interest rates that we saw...it caused this to be a sticker shock to many buyers. This paired with the home prices that have stabilized where they are at can make it a bit more difficult to purchase a home, which can really bring down current buyers.
Rest assured, though, these interest rates shouldn’t scare you off from building your own generational wealth.
I always tell my buyers that the right time to buy is when you can afford it! The best way to find out if you can is by talking to a lender. I work with phenomenal lenders to get you the best rate, and work on any sort of grants and programs to save you as much money as possible when going through this process.
Let me show you how amazing my team can be- and let’s get going on building your Real Estate Portfolio!