Due to the recent uptick in unpredictable mortgage rates, timing has become crucial in the housing market.
Rates that were approaching 6% are now approaching 7%, which has many buyers returning to the sidelines. On Friday, Mortgage News Daily reported the rate to be 6.78%. Recent inflation news is what caused the rate to increase.
In prepared remarks, Los Angeles Redfin realtor Justin Vold noted that while well-priced properties continue to receive many offers, he did observe that this week, as interest rates began to creep back up, buyers made fewer offers.
Since the beginning of the epidemic, buyers have been extremely sensitive to rates, according to Vold. I’m recommending folks pull back from daily rate changes and think about their long-term demands in today’s topsy-turvy market.
It is a perfectly good time to buy because there isn’t much competition if someone plans to live in a home for a long time and can pay today’s loan rates.
According to Vold, it might not be the best time for someone looking for a short-term residence and/or who can bear to pay their mortgage with a 6% or 7% interest rate.
Although interest rates will eventually decline, we don’t know when they will, so buyers must be prepared to maintain the original payment for the whole 30 years of their loan, he said. Reducing the monthly payment will be a plus when the opportunity to refinance does arise.
The housing market recovery will remain precarious until we see inflation and the general economy improve for a longer period of time, Redfin Economics Research Lead Chen Zhao said in prepared remarks.
According to Redfin, almost 85% of homeowners have interest rates far below 6%, and many are content to hold onto them.
The median list price of recently listed homes was $378,118, an increase of 1.2% over the previous year and the lowest since May 2020.
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