Why Rising Rates Are Creating Opportunities

How rising rates affect buyers and what that means for you in this market.

Mr. Licorice and I are back again to talk about 30-year conventional mortgages. The average rate is up over 5%, the highest in over 10 years. What does this mean for you?

First, you’ll be spending hundreds more each month when you buy a home. The good news is that mortgage rates fluctuate, so when they go down again, you can refinance and reduce your monthly payments. What’s not likely to come down any time soon is home prices. If you decide to wait, you’ll end up paying more each month because home prices are still on the rise. 

Last month, I was out searching for homes in South Jersey with a very active buyer. We got to a showing, and there were probably 40 cars lined up around this house. I thought there must be a party, but there wasn’t; it was our showing. It was an open showing, so people were everywhere, and we could tell right away that there would be multiple bids.

The time to take action is now.

My buyer had lost out before in multiple-offer situations, so he was ready to go this time. He offered $100,000 over asking, waived the home inspection, and agreed to make up any appraisal gap. Guess what? We didn’t win the home. 

Buyers are getting frustrated, and when they see this interest rate hike, some will choose to sit this market out. When they do, there will be more opportunities for those who stay in. My advice is to not wait; you cannot time the market. The time to take action is now.

If you have any questions about this or real estate in general, don’t hesitate to call or email me. I would love to hear from you.