Interest rates have increased this year. According to industry experts, it is likely to do so more during the year. This is important news for folks who intend to buy a home this year. Interest rates increasing this year and advice for real estate consumers in Florida is discussed further below.
Why Interest Rates Increasing This Year Are Important
Interest rates directly impact monthly mortgage payments. An increase in interest rates result in a lower approval level or a higher mortgage payment for the same house. Even a modest change can result in a difference. If you are trying to buy a house at the max of your price range, a tiny change will really impact your purchase options.
Below is an example of how pre-approvals may adjust with interest rates. This is assuming a particular down payment percentage and retaining the same mortgage payment.
| Interest Rate | Price Max |
|---|---|
| 4.00% | $393,552 |
| 4.25% | $381,932 |
| 4.50% | $370,817 |
| 4.75% | $360,181 |
| 5.00% | $350,000 |
Additional Affordability Factors
Other than interest rates, home prices may also experience movement. In many markets, house prices have risen consistently for more than a year. Bidding wars and sales above asking price are frequent again. Much of this was created by scarce home inventory.
Advice For Real Estate Consumers In Florida When Weighing Whether to Buy Now or Later
Upward interest rates and market values both negatively impact buyers. Buyers will realize that their affordable price is less as this continues. The type of properties at a certain price range will downgrade too. All things considered, it is seemingly best to buy now rather than waiting.
The Spring Home Market
Spring is often the busiest time of year for real estate. There should be more inventory to meet the growing demand, but competition will be strong too. Individuals electing to act may benefit from reasonable interest rates. Likely increases in property prices will provide an opportunity to build equity faster than usual.
