You turn on your TV and flip the channel to the 6:00 news. INFLATION. HIGHER RATES. INCREASED HOME VALUES. These are a few of the common words the media has been using to describe today’s Real Estate market, and many prospective home buyers have begun to worry about whether their window to purchase a home was closing. Is it still a good time to buy a house? Michele Harmon Team says YES!
By July 2020, the 30-year fixed rate fell below 3 percent, and it continued to fall to a record low of just 2.65 percent in January 2021. Today, FreddieMac reports the average 30-year fixed rate mortgage at 5.3 percent. Yes, interest rates are HIGHER, but they are not necessarily HIGH.
Mark Fleming, Chief Economist at First American, explains it like this:
“Rising mortgage rates impact affordability, but historical context is important. An average 30-year, fixed mortgage rate of 5.5 percent is still well below the historical average of nearly 8 percent. Even with mortgage rates at 5.5 percent, house buying power is over $360,000, which is still strong and at the same level as 2018.”
Trying to catch the PERFECT rate should never deter you from owning your dream home. You marry the house and date the rate. In other words, you are marrying the house you have fallen in love with. That interest rate? You are just dating that and won’t even take it home to meet the family! When interest rates get lower, you can always refinance!
“Recent bias may have many thinking that rates below 3 percent and house-buying power above $450,000 is normal, but it is anything but normal from a historical perspective,” Fleming said. “The last two years were the exception, not the rule, and the housing market is adjusting to a not-so-new normal.”
If you find yourself questioning whether now is a good time to purchase a home, just remember…MARRY THE HOUSE. DATE THE RATE. DIVORCE THE RENT.
For further analysis of home affordability, you can visit the National Association of Realtors’ Housing Affordability Index. The NAR Housing Affordability Index measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the National and Regional levels based on the most recent price and income data.
We would love to talk to you more about this shifting market and answer any questions you may have! Give us a call at 713-818-1330!