As we come to the end of February, is love still in the air? Your love of interest rates and HGTV home tours? HA!
We are still "in the 7's" for the most part, for a "typical" 30 year conventional mortgage. I was sitting with one of my loan partner's earlier this week and overheard that there are about 35 factors that go in determining the interest rate someone will receive. When you are shopping for a mortgage, try to be conscious that lenders are not able to pull a rate out of thin air for you. It takes a mortgage application and understanding of what you may have for reserves, cash to close, and several other factors.
With that being said, the interest rates being higher changes affordability for buyers. It is a very different discussion on what your monthly payment will be on a $40,000 vehicle at 1.9% interest versus 6.75%. It's the same on a home; very different. What does this mean for a lot of sellers? They are having to price themselves under what they hoped for, or, the home may sit on the market for a bit longer. No, there's nothing wrong with it potentially. It's that the American people are having to juggle their monthly finances, their vehicle obligations, their loans, and each of those categories are seeing increases one way or another.
We are seeing quite a few folks swapping to renting versus trying to buy; it makes more sense for them in the current climate. This may mean we will see more stringent landlord/property managers, because they may have multiple applications to consider and are wanting to take the most qualified based on income and other factors.
I hope you have enjoyed this blog. Of course, if you have any questions or wonder how your situation may shape up in today's market, feel free to get in touch!
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