If you bought a home recently you may have done so because of historically low interest rates. But now that rates are on the rise, you may be wondering what that means for you. If you already own a home and have a set rate, you shouldn’t have to worry too much. However, if you have been thinking about buying a home but haven’t done so yet, there are a few things you need to take into consideration.
Interest rates have steadily been on the rise this year in 2022, and experts predict this trend will continue. The Federal Reserve has already increased interest rates this year and has indicated that rates will rise again in the near future.
If you’re thinking about buying a home, here is what rising interest rates could mean for you:
The Bad News:
- Your monthly loan payments will be higher.
- The total loan payoff costs will be higher.
- It could be more difficult to qualify for a loan.
The Good News:
Prices of homes in your area may fall.
However, just because we are seeing a rise in interest rates, it doesn’t mean we expect to see the real estate market in the Colorado Front Range slow down, or burst. Home inventory remains low while housing costs are steadily rising in our area. And, while it may not seem like it, houses are actually more affordable now than they were in 2007 when we were experiencing a real “housing bubble.”
Consider this data on supply and affordability from NAR and Black Knight, provided by Keeping Current Matters:
The bottom line is that interest rates are rising, and if you’ve been considering purchasing a home, now is the time to do so. Rates are still relatively low, however, we do expect to see a continual rise in the foreseeable future.
