When I want to get all hot and bothered and excited, there are a few things that come immediately to mind that get me there.
- Really good cheese.
- Etta James’ music.
- Oozy-goozy chocolate (add sea salt and … oh … my … God).
- My boyfriend’s aftershave.
Near the BOTTOM of this list—read: something that is NOT super-sexy and exciting—is mortgage financing and interest rates.
On the sliding scale of sexiness, mortgage interest rates rank somewhere between nursing home pedicures and turkey bacon.
Regardless, if you’re someone who’s thinking about buying a house, then you’ve gotta GET excited about mortgage interest rates. Because mortgage interest rates can make or break your buying power. And power—Ooooooh! Power!—is sexy, right? Whatever. Just go with it.
RIGHT NOW, interest rates—according to our friend, Denise Hosek, at Annie Mac Mortgage in Austin—have gone up above 5%. When The Fed raised interest rates in March, we all expected that mortgages rates would creep up right along with them… they did!
If mortgage interest rates go up just a percentage point, your monthly mortgage payment could go up by several hundred dollars per month. And that’s a big deal. An extra $300 each month is an extra $3600 per year. I don’t know about you, but for me, that’s not chump change.
For example: If you want to buy a house that’s $500,000 and you have an interest rate of 5.25%, your payment will be around $2208 (not considering property taxes and homeowners insurance). But if you buy that same house and have an interest rate of 6.25%, your monthly payment will be $2462 (ish) And if you buy that same house and have an interest rate of 7.25%, your monthly payment will be $2728.
Have I got your attention? Are you worked into a lather? Yes? Good.
Now, we know that Texas is a state in which there is high demand for housing. There’s lots of buyer demand. Knowing that, answer this question for me: will home prices go down, or will they go up? If you said “UP,” you win the bonus prize (which, at the moment, is our thanks for sticking with this post this long).
So, if home prices go up and mortgage rates are ALSO likely to go up (because they absolutely will; when it happens is just a matter of time), it stands to reason that buying a house sooner, rather than later, would be a good idea. I think that sounds like a good idea. What about you? Yes? Yes. Good.
REALTORS talk all the time about “the spring or summer market.” The reason for this is that spring and summer is the time of year when most sellers put their homes on the market. It’s when the most buyers are out and about and competing for homes that are listed. And we’re just a few weeks into the spring market of 2022 and I mention this right now because it fits into this perfect real estate storm (storms are sexy!) of rising interest rates and increasing home prices.
Can you see where I’m going with this?
If you are thinking about buying a home this year—if you are ready to take that step—then NOW is the time. Interest rates are going to go up. Home prices are going to go up (that’s just a fact of life). With interest rates going up, there will be fewer buyers out there now than there was a few weeks ago when interest rates were lower. If you are thinking about it—seriously thinking about it—then put down the cheese and the chocolate and put Spotify and Etta James on pause and talk to a lender and a REALTOR today.
The sooner you do it, the more likely you are to get the home you want and the price you want and at the rate you want.
And do you know what getting what you want is? You guessed it: SEXY.