Interest Rates Have Increased so What Does this Mean for Home Buyers?
There’s no need to panic since the downward channel of interest rates has been decreasing since about 1989. The lowest interest rate we’ve seen over the last 40 years was just a year ago at about 2.5% but over the last three months we’ve seen the largest increase on the interest rates which brings it now to about 3.16% and maybe even closer to 4% which would take us out of the channel of the downward scale.
So what is this mean for homebuyers currently applying for a loan?
While anything below 5% is still a screaming good deal it can make homebuyers a little weary to pull the trigger on a deal. Don’t let this deter you though because even in 2007 and 2008 the average interest rates at the peak of the market were nearly 7%. Since we’re still under 4% mark buying a home now still makes good financial sense although waiting too much longer may not be in your best financial interest.
While we can’t predict with 100% certainty the direction of the interest rates over the next six months major banks have stated that because the economy is improving interest rates will naturally increase. It’s an overall curve that home buyers, sellers and investors need to keep a close eye on should they be delving into any real estate transactions or financing in the next six months.
My suggestion? I wouldn’t wait too much longer to jump on the market especially since there are more homes for sale during the summer months and once school hits the inventory may drop even lower. There are several homes on the market right now and fewer and fewer foreclosures and bank-owned homes which means the sellers can get a little bit more picky as to whom they sell to.
While I never suggest waiting too long my overall and bottom-line suggestion would be when you find the home that you love don’t wait. Don’t settle - but the best time to buy is when you find the home of your dreams. Start by searching through all of the homes for sale in the Portland area on my website or call me for a more personal touch.
More information: Should I Invest in Portland Real Estate?