We are all hearing how inflation is rising across the country. Already this year, the Federal Reserve has raised interest rates several times in an attempt to slow down inflation. The increase in interest rates has dramatically affected mortgage interest rates.
In October 2022, interest rates for a 30 year fixed-rate mortgage were about 7%. Contrast that to January 2022, when mortgage rates were only 3.1%. The 4% jump in the interest rate significantly impacts the buying power of a borrower and cuts their purchasing power by almost half. Additionally, here in Northeast Florida, we’re not seeing a large drop in home values. So with purchasing power decreasing and home prices continuing to stay steady, what can you do as a buyer?
One strategy to afford the house you want and keep costs within your monthly budget is to look into "buying down" the interest rate. This is something you can do on your own or, potentially ask a seller to do on your behalf during the negotiation process. Buying down the rate may be a wise financial decision as this can make a large difference in your total payout over the course of a 30-year mortgage.
Northeast Florida remains one of the top destinations to relocate in the country right now, and we still have a shortage of available homes. Historically, a "balanced" market has 6 month supply of homes for sale. Right now, in our area inventory of available homes is only 3 months. So, if you are considering listing, it is still a good time to sell.
Now it's more important than ever to have an experienced real estate professional to guide you through the changes in the market. Our team can help you navigate your options and find solutions that will be best for you in both the short- and long-term.