Are Higher Mortgage Rates Here To Stay?

Recently, there has been an upward trend in mortgage rates, drawing significant attention from the media. If you've been keeping up with the news, you might have noticed that rates have recently surged to their highest point in more than two decades, as illustrated in the graph below:

Feeling like a setback, especially if you're contemplating a move, the recent surge in mortgage rates prompts the question of whether to postpone plans. Understanding the impact of higher rates is crucial. Mortgage rates are undeniably higher than recent years, impacting overall home affordability. The principle is simple: the higher the rate, the costlier it is to borrow for a home, resulting in increased monthly mortgage payments.

The Urban Institute highlights the current impact on buyers and sellers:

"When mortgage rates rise, monthly housing payments on new purchases also increase. For potential buyers, higher monthly payments can reduce the share of available affordable homes... Additionally, higher interest rates translate to fewer homes on the market, as existing homeowners are inclined to hold onto their homes to maintain their low-interest rate."

Some are opting to delay plans due to the current rate situation, but the question remains: is that a sound strategy?

Anticipating where mortgage rates will go is a common desire, but the uncertainty is paramount. Forecasts suggest a decline in rates in the upcoming months, yet recent data indicates an upward trend. This uncertainty underscores the challenge of predicting mortgage rates.

The best advice for your move is not to attempt control over the uncontrollable, such as timing the market or predicting future rates. CBS News recommends:

"If you're in the market for a new home, experts typically recommend focusing your search on the right home purchase — not the interest rate environment."

Instead, focus on assembling a team of skilled professionals, including a trusted lender and real estate agent. They can elucidate market dynamics and their implications for you. Whether you're moving due to a job change, wanting to be closer to family, or undergoing another significant life change, the right team can help you achieve your goal even in the current circumstances.

In conclusion, the best advice for your move is to refrain from attempting to control what you can't control—especially mortgage rates. Even experts cannot definitively predict their trajectory. Concentrate on building a team of trusted professionals who can keep you well-informed. When you're ready to initiate the process, connect with a local real estate agent.