Since interest rates are predicted to keep rising in 2019, the time to buy or sell is now.
How will rising mortgage interest rates affect buyers and sellers in 2019?
In 2018, we began to see them climb, and in the third quarter, we saw the average rate for a 30-year mortgage hit 5% for the first time in 10 years. They’ve recently dropped back down to 4.75%, but throughout the rest of the year, they’re expected to climb back up again.
If you’re a homebuyer, don’t be alarmed by this development and let it keep you from buying. If you wait any longer, rates will likely just increase and shrink your affordability. For every 1% that interest rates increase, homebuyers’ affordability shrinks, on average, by 10%. For example, if you’re looking to buy a $200,000 house and rates rise by 1%, you’d then only be able to afford a $180,000 house. In other words, now is the time to buy—before interest rates climb even more.
If you’re a home seller, the same message applies. The longer you wait, the more interest rates will rise, and the more they rise, the fewer the number of buyers who will be able to afford your home.
If you have any other questions about this topic or you’re thinking of buying or selling a home, don’t hesitate to reach out to me. I’d love to help you.