What’s Going on With Interest Rates?

Here’s what you need to know about rising interest rates and our market. 

What’s happening with interest rates? They’re on everyone’s mind, so I want to break down what’s going on and what it means for you. 

Around January 2022, rates were between 3% and 3.5%, which was fantastic. Rates were historically low, and buyers are clamoring to buy homes and lock in a cheap monthly payment. Now, rates are right around 6%. Why are they rising so fast?

First, rates had been kept artificially low for years. The Federal Reserve was keeping rates strategically low to spur the economy during a tough time, and most experts knew it couldn’t last. Now, the Fed is raising rates to slow down the economy and curb inflation. 

Our interest rates aren’t crazy high; they just used to be very low. 

One of my mentors put it this way: Interest rates will continue to rise until demand slows. While some people may have sticker shock when they look at prices, it’s important to remember that our current rates are the historical norm. Things aren’t crazy expensive; they just used to be very cheap. 

That being said, I have a few suggestions for those looking to buy in this market. First, stay in constant contact with your real estate professional so you can be up to date on the most effective strategies. Second, keep in touch with your preferred lender. When rates spike, your buying power is affected. Check to see if your budget has changed and what you can do to potentially lower your rate. 

If you have questions about today’s topic or anything else, please call or email me. I am always willing to help!