HAMPTON ROADS, Va. (WAVY) – The Federal Reserve has raised interest rates for the sixth time this year.
This increase will have a direct impact on your wallet, making it harder to get a mortgage and pay off debt.
Even with the economy as it is, local real estate agents say now is a good time to take a second look at the housing market if you’re looking to buy a home.
The Federal Reserve raised interest rates by three-quarters of a point. It’s the fourth straight time they’ve raised rates in a bid to tackle inflation, which is near a 40-year high.
Even though rising mortgage rates seem like bad news for the housing market, it could lead to lower house prices, which would put some power back into buyers.
“Homes are still selling and the number of transactions will stay the same, which is good for Hampton Roads,” said Barry Jenkins, chief marketing officer of Better Homes and Gardens Real Estate Native American Group. “It’s also good for buyers who couldn’t buy a year ago because they didn’t have all that extra money to come up with.”
Jenkins says as rates continue to rise and demand declines, we could see the market stabilize. He also says they’re no longer seeing dozens of offers on homes, which is good news for buyers looking for less competition.
Jenkins says that even though mortgage rates are higher, buyers don’t have to bring as much cash to the table. Plus, some sellers are now even covering closing costs.
“At the end of the day, in Hampton Roads, we just don’t have enough homes for sale, so supply and demand means that when we have a home for sale, we may get 10 to 15 offers,” said said Jenkins. “Now we’re seeing buyers drop off significantly, so maybe instead of having 10-15 offers, we’ve got one or two.”
However, with high inflation, Jenkins says it might be a good idea as a seller to cut your budget or look in a different area so your portfolio isn’t stretched.
“When you look over the past 12 months, there haven’t been a lot of people who have reduced their home prices,” Jenkins said. “There are sellers who still think it’s 2020 or 2021 that haven’t fully adapted to the changing market yet and so they need to reevaluate.”
Mortgage rates have gone from 3% to 7% in less than a year, and even though rates are high, there are ways to get a better rate.
Belinda Price, Essex Mortgage Area Manager, says you could work to boost your credit score. This could help homebuyers get a more affordable mortgage rate, increase their down payment, shop around with different lenders, or find the loan that’s right for them.
“If you’re a first-time home buyer, you might not have 20% to put down on a house, especially now with inflation,” Price said. “So you could put down 3.5% and take out an FHA mortgage and actually have a better rate than you would on a conventional mortgage.”
Price says 30-year fixed-rate mortgages are common, but there are plenty of other options that might be better suited to your situation. For example, 15-year loan rates are generally lower than 30-year loan rates.
She says that even if you buy a house with a higher interest rate, you can always refinance later.
Price says it’s also important to speak with a licensed mortgage advisor. She says that in addition to offering expertise, some companies may offer a better APR or lower closing costs.
“Work with someone you enjoy working with who can provide different scenarios for your unique needs,” Price said.
Even though house prices are falling, Jenkins says the market is still good for sellers too because inventory is still low.
He says it’s always important to talk to an experienced agent about your best options, whether you’re buying or selling.
“There’s a nuance here that yes, rates are going up, but there’s an opportunity in a certain segment of the buyers group to actually earn where last year they weren’t,” Jenkins said. “Money is important to all of us and if you can save some of it and pay a little more most people will choose to.”
Jenkins says if you’re looking to sell, make sure your home is looking its best.
Make necessary repairs, consider staging services, and use good marketing practices. All of these factors can make your home stand out from the crowd to give you the best possible deal.
“Statistically listing your home at the right price is one of the best things you can do when selling your home,” Jenkins said.
Jenkins says if your home is currently on the market and you listed your home based on when the housing market was at its peak earlier this year, you could scare off buyers who can no longer afford that price range. price.