How rising interest rates are affecting buyers power
How rising interest rates are affecting buyers power.
As the country begins to slowly move towards reopening, the real estate market is noticing an uptick in interest rates. Rates reached record lows during the height of the pandemic, creating a market that was excellent for those who chose to sell, with buyers scrambling to purchase properties as soon as they hit the market. However now that rates are starting to go up, buyers in particular need to be paying attention to the rate at which interest rates rise.
For buyers, increased rates mean that they need to finish securing a loan as soon as possible to lock in the lower value. Nationally, 15 year fixed rates have gone up .04% landing at 2.64% and 30 year fixed rates have gone up to 3.63%, a change of .07%. These numbers show a shift that occurred in a week, from March 23, 2021 to March 30, 2021. Buyers should still be able to benefit from this comparatively low interest and should stay attentive to the market to secure their ideal home. Despite this positive outlook, buyers are still going to be affected by any movement in interest rates.
The rate that is locked in by your lender dictates the amount of money that you are able to borrow. That set sum then limits the prices on houses that now fit into your unanticipated budget. A low interest rate creates more flexibility in money that banks or other lenders will provide and as rates increase, they are less likely to deal out larger sums. Ways to compensate for rising interest rates include saving more for a downpayment, lowering your debt-to-income ratio, and working on improving your credit score. As the economy bounces back, the interest rates will as well and will affect sellers just as much as buyers.
Talking with the right realtor who has your best interest at heart is another way to secure you the home of your dreams. We have the latest Camarillo homes for sale and the strongest Moorpark realtors to guide you through buying and selling houses in Ventura County.