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Mortgage interest rates today may not be the same as recent historic lows, but there’s no need to panic New potential home buyers out of the market
In fact, there are many reasons why now might be a good time to start your search for the perfect home. Or, if you’ve recently stopped browsing in anticipation of lower rates in the future, you might want to consider picking up the search again. Although with Today’s mortgage rates With an APR of around 7%, you can start reaping the benefits of home ownership and potentially save by buying a home now.
Start comparing mortgage interest rates you may qualify for today here.
Should you wait for mortgage rates to drop?
Here are some reasons why experts say you don’t want to wait for mortgage rates to drop before buying a home.
There is no guarantee that rates will be lower
Federal interest rates, and the mortgage rates affected by them, move cyclically. While we know mortgage rates have come down a lot in the recent past, so have they Historically much higher. In fact, today’s rate is actually Not that high Compared to historical values.
While mortgage rates may begin to fall later this year (or later if the Fed stops raising rates), there’s no way to say for sure when or by how much.
“Interest rate movements are extremely difficult to predict, no one predicted they would rise as fast as they did,” says Colin Zizzi, CFP, founder of Zizzi Investments, so you shouldn’t try to bet on them.
“My recommendation to my clients is always to buy a home when they’re financially ready, and not based on where rates are currently,” says Jizzi.
See what mortgage rates are available to you now here.
Benefits for today’s buyers
Although it is true that many buyers today have higher mortgage rates and Lack of homes for sale In some markets, some experts believe there are still benefits buyers can take advantage of today
“People need a place to live, and depending on the local market, there’s no guarantee that home prices won’t rise significantly while you wait for interest rates to drop,” says Quinn Arnold, CFP, co-founder of Arnold and Total Wealth Management. .
In fact, you may be able to score some more competitive terms as a buyer in a higher rate environment than you would otherwise.
“If you can get into a home today, it’s a good time to buy because sellers are more flexible on prices and terms than they will be three years from now,” says Denver-based real estate expert Deviri Vallejo. “So buyers may be able to get in on a lower cost basis and of course you have the benefits of home ownership (building equity, tax write offs, etc.).” Once rates drop, Vallejo said, even more eager buyers will make the market more competitive.
You can always refinance
Of course, buying a home with a relatively high mortgage rate can have long-term consequences for your finances. The higher your mortgage rate, the more you’ll pay over the life of your loan — which can span decades.
luckily, Refinancing is always an option. If rates drop in the future, you may be able to lower your interest rate and save for the long term. However, you should still do what you can Score the best rates today. “It may be possible to refinance the mortgage later when rates drop, but you don’t want to rely on that strategy, as valid as it is,” says Arnold.
Even if you want to refinance in the future, make sure you can afford your monthly payments throughout the term of your loan. You don’t want to count Refinancing In the next year or so, and stick with one Payments you can’t afford.
Curious what refinancing options are available today? Start comparing rates available here now.
Bottom line
Although Mortgage rates are up In 2023, experts say many potential homebuyers have no reason to wait. It’s impossible to predict the future, so rates may stay higher than expected (or today’s rates really are the new normal). But if buying a home is your goal — and within your budget — experts say the best time to buy is when you’re financially ready and you can find a good deal. Regardless of the current interest rate environment, you can benefit by securing your home and starting to build equity now.
Find out the best mortgage rates you can qualify for today here
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