Sitting down with Shane Hofmann to discuss interest rates in our market.
Today we’re joined by Shane Hofmann from Edina Realty Mortgage, who is here to give us some insight into the current hot-button issue in real estate: interest rates. Where are they now, and how does the fact that they’re on the rise impact the housing market?
Banks and mortgage companies post their current rate to give a general idea of where things are, but that rate isn’t necessarily what everyone will receive. The rate you’ll get approved for depends on your loan type, credit score, down payment, and other factors.
It’s no secret that interest rates have been fluctuating more this year than they have previously. We’ve seen rates change by a few points within a matter of months. How does that affect the market? Well, even small jumps can change a potential homebuyer’s price point by increasing their monthly payments.
“Rising rates haven’t debilitated the market by any means.”
Luckily, concerned buyers have the option to pay points to bring their rates down. Over the last few years, it didn’t make much sense for buyers to pay extra to get an even better rate, since rates were so low. However, in today’s environment, it may be worthwhile depending on how long you plan to stay in the house and your ability to afford the additional upfront cost.
We’ve just come out of almost a full decade of incredibly low rates, which makes today’s rates of between 5% and 6% seem high. However, it’s important to remember that despite having risen quite a bit since the beginning of 2022, interest rates are still historically low. People continue to buy and sell homes based on their needs—rising rates haven’t debilitated the market by any means.
If you have any questions about mortgage rates or how they’ll impact your ability to buy or sell a home, please give us a call or send us an email. We’d love to help you.
