Over my years as a Realtor, I’ve noticed how the first thing homebuyers look at is price. As obvious as this observation might be, significant issues can arise when price – not financing – is the only consideration.
It might not seem like a big deal, but locking in an interest rate when the rate is lower can potentially make thousands of dollars difference in the lifetime of your mortgage and could change your monthly payment by hundreds, which could make your dream home unaffordable or not.
And the simple fact is home prices won’t be seeing any dramatic price reduction in the near future. So, locking in a favorable mortgage is one of the best ways to make sure you get the most for your homebuying dollar.
Speaking of mortgage rates, they rose sharply above 3% this past week – the highest since April – as consumer and producer prices continue to inflate due to persistent supply bottlenecks and labor difficulties.
The 30-year fixed mortgage rate moved up to 3.05% from 2.99% the previous week, finance mortgage provider Freddie Mac reports. So, it seems rates at the 2% range are over.
A question that pops up for millions of homeowners is whether it’s a good time to sell their home. People typically sell their home after 16 years, the U.S. Census Bureau reports. Meanwhile, there are about 20.2 million homeowners that purchased their homes in the last 10 to 19 years.
Thus, many of these homeowners might wonder if they should sell their homes now or wait.
Nadia Evangelou, senior economist and director of forecasting for the National Association of Realtors, explains:
“There’s no doubting it’s a seller’s market. Although the market typically slows down in the fall, there’s still stiff competition among buyers, with multiple offers for each home due to low inventory.
“As a result, sellers continue to have strong negotiating power, as most of them are able to sell their home for higher than the asking price.
“Comparing sales volume with current inventory, we’re also seeing that homebuying activity is very strong. Specifically, more than half of the inventory was sold in August since the sales to inventory ratio was 0.51.
“Nevertheless, the sales to inventory ratio was only 0.07 back in 2009. Remember that a higher ratio implies a seller’s market, while a lower ratio implies a buyer’s market.
“Secondly, mortgage rates are still historically low, while the outlook is for higher rates in the upcoming year. With lingering inflation, the Federal Reserve Board might start tapering earlier than expected.
“Specifically, the Fed recently announced it will begin to gradually decrease its purchases of long-term Treasurys and mortgage-backed securities before the end of the year.
“Moreover, the Fed will also raise interest rates by the first half of 2022 in order to control elevated inflation.
“Both of these strategies are expected to move up mortgage rates in 2022. The National Association of Realtors forecasts the 30-year fixed mortgage rate will reach 3.6% by mid-2022.”
So, if you happen to be on the fence about purchasing a home, the recent increase in new listings and lower than projected interest rates might mean it’s time to act.
Whether you’re buying or selling a home, utilizing a Realtor is the best way to ensure your best interests are taken into account. We love and serve our community’s real estate needs every day. That’s Who We R.
Founded in 1912, Greater Chattanooga Realtors is a regional organization with more than 2,500 members servicing Hamilton and Sequatchie counties in southeast Tennessee and Catoosa, Dade and Walker counties in Northwest Georgia. The association is one of approximately 1,100 local associations and boards of Realtors nationwide that comprise the National Association of Realtors. Greater Chattanooga Realtors owns and operates a Multiple Listing Service, which is one of approximately 600 MLSs in the country, and services more than 2,700 MLS users.