Mortgage rates have increased over the last few months. According to industry professionals, it will rise more this year. This is critical news for home buyers. Expected mortgage rate changes in 2018 and advice for real estate consumers in Washington is provided below.
Mortgage rates are specifically related to monthly home ownership costs. An increase in mortgage rates result in you being approved for less or a more expensive monthly payment for the same property. Even a modest rise will make a difference. If you are searching for a property at the max approval level, a little rate increase will really affect you.
Below is an illustration of how pre-approvals can fluctuate with mortgage rates. This assumes a fixed down payment percent and retaining the same mortgage payment.
|Mortgage Rate||Purchase Price|
In addition to mortgage rates, home values may also change. In most regions, property prices have been increasing steadily. Certain markets are seeing bidding wars and offer prices beyond asking. Much of this was created by inventory not matching demand.
Upward mortgage rates and market prices both negatively effect home buyers. Buyers will realize that they may afford less and less over time. The type of properties at a particular price range will diminish as well. With both factors in play, it is probably best to purchase now rather than delaying.
Spring is often the most active season for real estate. There should be a higher number of listings to accommodate the growing demand, but be ready for competition. Home buyers choosing to act will benefit from reasonable mortgage rates. Continual improvements in house prices will provide an opportunity to attain equity faster than usual.