Rates, rates, rates!
Unless you’re lucky enough to be a cash buyer, most of us have to get financing when purchasing a property. Naturally, rates area always a hot topic of conversation when starting your search. Getting a pre-approval is usually the best way to start so that you can know what you can reasonably afford to spend. Depending upon where the lending market it at can make or break how much you can afford to spend. Over the last few years the rates have plummeted which has helped contribute to a “buyers market.” For the last year or so we’ve been hovering in the mid 3% on a 30 year fixed rate. This is a historically low rate which has sparked a lot more buyers to enter the market. When it’s inexpensive to borrow money, more people do it!
When borrowing money is at an 18% interest rate, the amount at which you borrow drops dramatically. As the summer progressed and more and more sales were taking place the interest rates took a quick jump into the 4.75% range which made buyers nervous this was the end of low interest rates. As the market continued to progress the lack of inventory and more buyers trying to get into houses forced the prices of homes up further. As of right now, rates are back down to 4.2% and prices are stabilizing. Sales however have not seemed to slow down as they traditionally do heading into the fall.
We’ll have to wait and see how the year concludes!