What Does The Interest Rate Hike Mean For Home Buyers?

The last two years caught many of us off guard—and not just because of the pandemic. We experienced the hottest housing market on record, with home prices in Collin County rising by 10%-20% in 2021, driven primarily by low mortgage rates and a major supply shortage. While some had hoped 2022 would bring a return to normalcy, the North Texas real estate market continues to boom, despite rising interest rates and decreasing affordability. Find out how they could affect you if you’re planning to buy in 2022.

Mortgage Rates Are Rising

Over the past couple of years, homebuyers have faced intense competition for new homes—in part due to historically low mortgage rates that were a result of the Federal Reserve’s efforts to keep the economy afloat during the pandemic. However, in response to a concerning level of inflation, the Fed is now reversing those efforts by raising the federal funds rate. And as a result, mortgage rates are rising, as well.

Here’s Brad Boswell, our preferred mortgage lender, to tell us his perspective on the current interest rates. 

While current 30-year fixed mortgage rates have increased over the previous months, they remain well below the 50-year average of 7.77%. As inflation across the economy continues, the Fed is likely to raise rates further this year.

What can you do as a buyer? 

Interest rates are expected to continue rising. Your best defense is a good offense. If you plan to buy soon, apply now and lock in the rate! Depending on your lender, you can pay a few hundred dollars to guarantee today's rate for 15-45 days. If you are thinking about buying, your first step is getting pre-qualified. We encourage you to reach out to Brad Boswell to get started!

Brad Boswell with Town Square Mortgage & Investments

NMLS ID: 144975

O: (972) 333-3232

E: bboswell@tsmlending.com 

W: www.bradboswell.com

If you are thinking about buying or selling, contact me to discuss a personalized plan to get you what you want in today’s market!

Kelly Pearson, Licensed REALTOR®

Kelly Pearson Realty Group

Douglas Elliman

C: (720) 281-3640

E: Kelly@kellypearsonrealtygroup.com