Just one year ago, interest rates, which had been at historic lows, began to rise, and only recently leveled out and even dropped a bit. While the Wall Street Journal claims that higher interest rates are causing only minor slowdowns in market demand, even small interest rate increases will affect what you can afford.
As a buyer, you’ve probably calculated your mortgage price range based on your desired new monthly payment. However, higher interest rates probably mean the house you’re looking at may have a higher monthly cost than you were anticipating. For example, a $300,000 mortgage at 3.5% one year ago would have had a P & I payment of $1.347. That same mortgage today at 4.5% would cost you $1,520 or nearly 13% more.
If you are like most buyers, you may need to decrease your targeted price range in order to compensate for the higher interest rates. However what makes it even harder is that real estate prices in the Outer Banks are increasing, so a home that you might have been able to buy for $375,000 a year ago will likely be more expensive just one year later.
If you are in the hunt for real estate in the Outer Banks, you might not want to wait much longer. This combination of rising home prices and rising interest rates may hinder your ability to find the ideal property.
Coastal Outer Banks Realty can help you find the right property at the right price and we’ll work with you throughout the process, including helping you find the right lender. Call us today at 252-489-2140!