Are Rates Too High to Buy a House Now?

Filed under: Market Comentary

One of my favorite homeownership myths to address is the topic of interest rate fluctuations. I’ve been hearing people complain about how much rates have gone up, making them think that it’s a bad time to buy real estate.

One Fact to Change Your Opinion

I have one fact that will change your thoughts on this topic: since 1971, interest rates dropped under 5% for the first time ever in 2009. Since the housing crash, they’ve hovered at that point or lower. But consider the fact that we had 40 years of history with interest rates higher than 5%. Many people bought real estate during that time and were able to pay off their homes and benefit from the equity that was built over the years.

Historically, we are in a great place with current interest rates. Yes, interest rates hit a 9 or 10-year high in October or November last year. But they’ve settled back down since that point. We’ve seen the impact of those changes in the real estate market.

Keep in mind that even though interest rates are no longer at the point where they landed at the bottom of the market, we are still in a great place when you evaluate the historical perspective.

Your Personal Circumstances Matter

As always, it is important to make sure that you can afford to buy the house. It doesn’t matter what the interest rate market is doing, because the most important factor is based on your financial situation. If you are in a position where the house and the payment make sense for your family, then it is a great time to buy a home.

Also, remember to hold onto the long-term perspective of the benefits that are available from a real estate purchase. Owning a home might be one of the most important financial decisions you will make, especially when you have a place to live free-and-clear for your retirement years.

Don’t let the changes in interest rates affect your long-term financial goals. For more information, contact me at any time to discuss your financial situation so you can decide if it is a good time to buy a home. I’m here to help!

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