The first point to address is the current rise of mortgage interest rates. We’ve been fortunate to have the rates be as low as they have been, but, according to Freddie Mac’s chief economist, the days of the sub-4% interest rate are now over.
The question now is whether a 5% interest rate is still a good rate. Absolutely it is! When I purchased my own home back in 2008 at a rate that was less than 6%, I was ecstatic. Traditionally, that is a very good rate.
The next point is the lack of inventory. As of right now, there are 10% fewer homes on the market than there were just a year ago. As demand increases, supply either remains steady or decreases, causing a pinch in the market that actually makes your house worth a little more. Home values are increasing, so if you want to take advantage of that, now is a great time to sell.
What does this mean for the trajectory of the state of the market this year?
It means that we’re going to have a pretty good market, overall. Even if you’re looking to buy in this seller’s market, historically, this is still a good time to do so because you can still lock in a 30-, 20-, or 15-year mortgage at 4% or just a little above.
There’s one more thing to remember: If you’re a homebuyer looking for down payment assistance, there are plenty of loan programs with Maricopa County that will allow you to have a free down payment up to 5% if you qualify by making less than $88,000 per year and having over a 640 FICO score. It’s free money, so take advantage.
In addition, we negotiate with the seller to pay your closing costs so that you can go to purchase a home with nothing out of pocket.
If you have any questions or would like our help, feel free to reach out to us. We’d be glad to assist you.