Springfield real estate broker explains how you shouldn’t be afraid of more interest rate hikes
SPRINGFIELD, Mo. (KY3) - The average long-term U.S. mortgage rates topped 7% for the first time in more than 20 years. It follows the Federal Reserve’s rate hikes to help curb high inflation.
Long-term U.S. mortgage rates are at the highest they have been since 2002. Michelle Cantrell, the Owner, Broker of Cantrell Real Estate here in Springfield, said this is still an excellent time to buy.
“Real estate is very local,” said Cantrell. “So what you hear on the national news, don’t be scared. Talk to a real estate professional locally.”
Cantrell said the meager 2-3% interest rates we recently saw don’t happen often.
“Just 2%-3% interest rate is not sustainable, long term that usually follows something like a pandemic,” said Cantrell. “We’ve never seen anything like that before.”
Cantrell said in our area, home prices are slightly lower than the high hikes we saw in the summer, but in the end, housing prices will always rise.
“The housing prices went up over the past year 20% to 25% over the past two years, really,” said Cantrell. “So they’re going to continue to climb.”
Cantrell said buying or building new homes could be better than other options.
“With rental rates in our area, how much they have gone up, still get you into a house more affordable than rent a lot of times,” said Cantrell.
The Fed has raised rates five times this year to help inflation, which is at its worst point in 40 years.
Cantrell said the high rates were inevitable, but you can work to get the rate down.
“Work with the lender, there are different products, there’s like a two in one buy down, they actually can buy down the rate a couple of percents,” said Cantrell.
She said, for now, home buyers should get used to those higher rates.
“We had amazing rates. That’s gone,” said Cantrell. “I think this is more a sustainable rate. So I wouldn’t let people let that hold people up on buying.”
Bankers told me the demand is there, but the competitiveness, like bidding wars, isn’t happening as much, and they should buy now before interest rates get raised even more.
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