In 2022, the housing market has seen rising mortgage rates and home prices. This article will examine how house prices and mortgage rates impact home-buying, how rising mortgage rates will affect homebuyers, and what rising interest rates mean for the housing market. The National Association of Exclusive Buyer Agents (NAEBA) put this article together to address some common questions about rising mortgage rates and home prices.
Let’s look at how increasing house prices and mortgage rates affect the home-buying process.
You can’t secure a rate until you have a contract to buy a property. In today’s market, rates are rising so fast that the rate you were initially quoted could be higher by the time your offer is accepted. As a result, some of the houses you had your eye on may suddenly be above your desired price range, or you could even be forced to explore less expensive options. The result? Your search for a new home may slow down, or even grind to a halt while you re-examine your options.
But what do rising mortgage rates mean for the homebuyer?
Rising mortgage rates and home prices could make finding a property more difficult. As higher mortgage rates cause some sellers to reconsider, buyers can become more aggressive with their offers, which also adds frustration to the buying process. Combined with low inventory in the current market, everything about finding a home — from establishing a price range to finding available properties and then finally securing a home — becomes more challenging for the buyer.
So, how will rising interest rates affect housing market?
Increasing house prices and mortgage rates will escalate the competition in 2022’s already tough market. Higher interest rates can hurt buyers and lead to a decrease in home purchases. In fact, sales have already decreased significantly compared to last year, reports Alex Margulis, Vice President of Lending with CrossCountry Mortgage, LLC.
What now?
All of this may be leaving you feeling a bit overwhelmed, and you may be considering postponing your dreams of homeownership. Try not to get discouraged, as rising rent prices mean that owning a home may still be your best option. According to CrossCountry’s Margulis, rent prices are up dramatically compared to last year. So, if you’re looking to purchase, don’t let the current market keep you from doing so.
You may have heard that you need to find a real estate agent to help in your search, but what does a real estate agent do for a buyer?
Real estate agents can be contracted to work for buyers, sellers, or both – and it can be unclear whose interests they serve. This is where an Exclusive Buyers Agent comes in. An Exclusive Buyers Agent is invested in helping only the buyer and has an obligation to help you negotiate the best deal. Exclusive Buyer’s Agents can be particularly helpful in navigating challenging markets like that of 2022. NAEBA always recommends working with an Exclusive Buyer’s Agent to have a dedicated expert on your side when buying a home.