What’s Happening With Interest Rates?

Why interest rates are rising and how you can still afford a home.

What’s happening to interest rates? Why are they going up, and what will they do in the future? Don’t get scared just because interest rates are now higher. There’s a lot of creative financing happening right now, are there are still plenty of opportunities to make buying affordable. Keep in mind that our current rates of about 5% are still low compared to the historical average of 7% to 8%.

Why is this happening in the first place? Interest rates are rising because inflation is way up. When inflation goes up, the cost of everything rises as well. The Federal Reserve is trying to fight this by pulling money out of the market and charging more for federal money. 

"As inflation goes up, interest rates will rise too."

In general, you can define inflation as too much money chasing too few goods and services, which is what we’re seeing in the real estate market. We have a lot of people fighting for too few homes because not enough we’re built over the last 15 years.

As inflation goes up, interest rates will rise too. They may level off or not climb as high, but expect them to increase as long as we have inflation.

In the meantime, there are a few ways to fight this. You could buy your interest rate down, get the seller to buy down points on your behalf, or look at an adjustable-rate mortgage. There are different ways we can approach buying with higher rates to help you get the best deal.

If you’re trying to figure out what to do, give us a call. We can consult with you, talk about your specific situation, and help you figure out your best move in this market. We’d love to hear from you.