Why Buyers Shouldn't Wait

Amanda Hicks
Posted by Amanda Hicks
Updated on
Published in Market Updates

With a strengthening economy, mortgage rates are rising quickly and that can make a big impact on the path that buyers take when house hunting. 

As more time goes by and rates increase, buyers are more likely to stop searching until they make more money or settle for a smaller house. According to a recent realtor.com survey, 44% of buyers said if rates went up they'd settle upon a downsized house that costed less and required a longer work commute. 

Mortgage rates are the highest they've been in four years with a 4.6 percent rate on 30-year fixed loans and the feds say it's likely short-term rates will be risen this year too. First time buyers may be affected by rising home costs and interest the most because it places many of them out of the market. 

These rates send a sense of urgency to start thinking seriously about buying. Even minor increases make a big difference over time. 

Take this example from realtor.com: On a $300,000 house with a 30-year fixed-rate mortgage and 20 percent downpayment, the difference between a 4 percent and 5 percent mortgage rate is $142 a month. Calculated over the life of the loan, that is more than an extra $51,000.

"Buyers thought they could wait forever because rates were going to stay low forever," says Rick Palacios, Director of Research at John Burns Real Estate Consulting, "They're starting to realize that if they're going to buy, they should probably buy now."

Don't settle. Start your search with Waterfront Properties' customizable search or browse our featured listings here

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