Rising Interest Rates
In 2018, (due to the research of Freddie Mac), rates have increased from 3.95% in the first week of January to 4.40% for the first week of April.
With rates increasing, a buyer should take advantage of today’s lower rates! Experts believe that rates will continue to rise throughout the year and are expected to rise to about 4.48% by June. That average climbs to 4.73% by the end of this 2018.
How Could Rising Rates Affect You as a Buyer
Waiting until the end of the year to buy, with rates still projected to increase, will end up costing more money on your monthly mortgage payment. For every $250,000 you need to borrow, you will spend $49.21 more per month, $590.52 per year, and over $17,700 by the end of your 30-year mortgage.
Decreasing Inventories and Increasing Home Prices
There exists a myth that an increase in mortgage rates will cause a slowdown in home sales which would, in turn, lead to a fall in house values. Increasing home prices are determined by supply and demand. Rising mortgage rates may slow demand and, thus, affect supply.
A Buyer Needs a Real Estate Professional
As a professional, I am faced with questions regarding why a buyer would need me. Here are one dozen reasons:
- Understanding the process.
There are essential steps to a successful closing. They are:
- A fully executed contract with all important facets initialed.
- Buyer applying for the loan timely with the contract deadlines.
- Lender deadlines met according to TRID.
- Buyer purchasing insurance with the binder in place by closing.
- Loan Approval.
- Walk-through and signing off.
- Review of the Closing Disclosure and/or HUD.
- Title company’s involvement and advising of the wiring of funds.
- Handing over of keys, clickers and keys to the clubhouse.
- Registration with the water company as well as other local utilities.
- Registration with the HOA or COA.
- Pointing out the “not-so-obvious” features regarding the property.
- Negotiating better contract terms.
- Providing buyers with “tried and true” service vendors.
- Improving knowledge of the areas – so a buyer makes an informed decision about where to live, work and play.
- Obtaining knowledge of home values and how to calculate them.
- Providing education as to the market.
- Addressing challenges that may arise.
- Overcoming objections.
- Possessing effective negotiation skills.
- Planning strategically. A plan, a timeline, and the setting of expectations.
- Being a trusted advisor for new construction.
With rising interest rates, decreasing inventories and increasing home prices, a buyer would best hire a Real Estate professional because working with a professional costs a buyer NOTHING.
Buyers and Sellers: Work with a professional with knowledge of the area and the market as well as a proven track record for success.