Buying a home is one of the most significant financial and lifestyle decisions that someone can make, and with the current housing market and recent increase in interest rates, many people are questioning whether or not they should commit to buying a home right now or continue renting and wait for prices to go down. If you are interested in buying a home in the areas of Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, and have questions about the best time to purchase a home, Foundation Mortgage can help. Continue reading to learn more about the possible cost of waiting for mortgage rates to go down.
The Impact of Increased Mortgage Rates
You have probably noticed that it has become more and more expensive to purchase a home within the past few months due to the recent hikes in interest rates. The Federal Reserve has been continually raising rates, making it more costly to borrow money in an attempt to manage inflation. This has caused many potential homebuyers to lose some of their purchase power and consider waiting out the market to see if home ownership will become more affordable. As interest rates go up, the amount of funding you are able to borrow decreases even though housing prices may be lower, causing many potential buyers to reexamine the home they can realistically afford.
Is It Likely That Interest Rates Will Go Decrease?
Many people who are currently interested in buying a home are wondering if they should wait out the market to purchase a property in hopes that interest rates will go down in the near future. After the most recent rate increase, it is more than likely that already pricey mortgage rates will continue to rise higher, and it could take a substantial amount of time for prices to drop again. It is important to note, however, that even though it is more expensive to buy a home now than it was last year, rental prices have also increased, so it is pricier to rent now as well; essentially, you will end up still paying more money either way. When you own your own property, you are increasing the equity in your home, which will also boost your wealth over time. Therefore, purchasing a home now may make more financial sense for your situation.
Get Help Determining The Best Time To Buy a Home
Ultimately, every person’s situation is unique, so when you are deciding when to buy a home, it is best to work closely with a real estate advisor to determine what works best for you. If you are looking to buy a home in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, contact Foundation Mortgage today.