How Do Rising Interest Rates Affect Our Market?

How do rising interest rates affect you? I’ll go over a couple of things you should know if you plan on buying or selling a home.

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 Looking to sell in St Cloud? Get a free Home Price Evaluation

There have been a lot of questions about rising interest rates lately. 

The good news is that mortgage rates are still extremely attractive and hovering around 4%. Financing is readily available, and you can get a home loan with 10%, 5%, or 3% down. If you qualify for a VA loan or want to buy in certain rural areas, you can get a home with no down payment at all. 

What happens if interest rates go up in a year or two years from now? 

While we don’t know what rates will be, let’s say they go up to 6%. If you’re looking at a $200,000 house, your monthly payment would go up $273 a month thanks to your 6% interest rate; you would have to pay $1,192 a month. So, if you want to wait to buy a home, it could cost you more down the line. 

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If you wait to buy a home, your monthly payments will go up with interest rates.

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Also, let’s say that you qualify for a $200,000 house at a 3.75% interest rate. If rates go up to 6%, you would only qualify for a $155,000 house. 

Rising rates dramatically impact your purchasing power. 

There are two advantages to buying today. First, you will have a lower monthly payment for as long as you own the home. Second, if you do want to buy a home, then you will qualify for a lot more home now than you will in a couple of years (assuming that the rates go up). 

Right now, you have a great selection of homes on the market. If you are looking to sell and then buy, doing so now is fairly predictable, as most houses are selling in two to eight weeks. 

So if you are interested in buying or selling a home, or if you have any other real estate questions, just give me a call or send me an email. I would be happy to help you!

How Do Interest Rates Affect Your Spending Power in St Cloud?

There are many great St. Cloud area homes for sale. Click here to perform a full home search, or if you're thinking of selling your home, click here for a FREE Home Price Evaluation so you know what buyers will pay for your home in today's market. You may also call me at (320) 240-3363 for a FREE home buying or selling consultation to answer any of your real estate questions.

Although the year has just begun, we're already seeing some interesting trends.We're seeing a lot of people make discretionary moves to the kind of property they've been dreaming about and waiting to purchase for the last four to six years. Additionally, we're seeing an uptick in recreational property sales and an increase in homes on acreages. Homes on the water, both the river and the lake, are selling at a higher rate as well. 

Why is this? Well, interest rates are still historically low, making payments as  affordable as they've ever been! With the future of real estate uncertain, as far as interest rates are concerned, many people are acting now while conditions are great. 

Are you interested in upgrading, investing, or buying a second home? Now is the time to do so. If you would like to discuss your options and see whether it's time to make your move, give us a call or shoot us an email. We would love to hear from you!