Rising interest rates have begun to slow an overheated housing market as monthly mortgage payments have risen dramatically since the beginning of the year. This is leaving some people who want to purchase a home priced out of the market and others wondering if now is the time to buy one. But this rise in borrowing costs shows no signs of letting up soon. In fact, 2 months ago rates above 7% seemed unthinkable, but we’re nearly there now!
So, is now the right time to buy a home? Anyone thinking about buying a home today should ask themselves two questions:
1. Where Do I Think Home Prices Are Heading?
There are two places to turn to answer this question. First is the consensus of what experts are saying. If you look at what experts are projecting for home prices in 2023, they’re forecasting home price appreciation around 2%. While it’s true some are calling for depreciation, most are calling for appreciation in home values over the next year.
2. Where Do I Think Interest Rates Are Heading?
While it seems that the worst is behind us, it’s likely that mortgage rates will continue to rise, at least in the short term. Why? Well, the instability in the world and higher inflation are driving this volatile market, resulting in higher borrowing rates for those looking to buy homes.
Something to keep in mind: Your home CAN be forever, but your mortgage rate does NOT have to! That said, if you’re thinking about buying a home, asking yourself about home prices and mortgage rates will help you make a powerful and confident decision. Experts see both prices and rates rising in the future. Renting is the other choice, but rents are also increasing. That may mean buying a home makes more sense than renting.