There has been a lot of talk about interest rate raises in 2022. The Fed recently reported there will potentially be 3 rate hikes this year to help battle our increasing inflation.
*This is just one example of an article about the Fed Rate Hikes in 2022*
From a Real Estate perspective, this is a very interesting topic. When you are thinking of buying a home and, like most people, need a mortgage, interest rates are consistently on your mind. If rates go up, so does your monthly payment. Or, in some cases, you can’t buy the home you want if the rate goes up enough that you can’t handle the new monthly payment. It’s a very tricky subject and should be discussed at length with your lender and realtor.
That said, the rate raises being talked about in the news are not Home Mortgage rates. They are not talking about popping up a 3% mortgage rate to a 4%, then 5%, then 6%. The rates being discussed do not directly affect mortgage rates.
Mortgage rates have already bounced up away from the record lows we were experiencing. Mortgage rates are far more volatile than the rates the Fed was discussing. They jump up and down more like stocks in the stock market and can change daily. Locking in a rate on a Monday as compared to Tuesday can be quite different.
So what should you do if you are thinking about buying soon? First, talk to an experienced lender and realtor to get local information. Then, move as quickly as your situation allows. I do not believe the sky is falling, in terms of rate increases, but mortgage rates will trend up this year and, as always, will be higher in the summertime as compared to the next few months. Lastly, in a market like Central Oregon that has experienced a lot of appreciation over the last 10 years, I would suggest taking the time you need with friends, family, and a financial professional to ensure, when you do buy, that you are on stable footing. Homeownership is phenomenal and the leading builder of wealth in America – just make sure you do it wisely.