It’s clear the 2022 Housing Market has been defined by rising mortgage rates. With rates on the rise, it’s also become more costly to purchase a home.
Mortgage payments are up over 50% compared to a year ago because of the difference in interest rates. This jump is making homes less affordable especially when compared to the last two years when mortgage rates were at historic lows which has caused so many would-be buyers to reevaluate their plans.
The good news is that you can navigate today’s housing market in this rising rate environment with a few simple tips. Here are three things you may wanna consider to make your homeownership goals reality.
Number one, expand your search criteria. If you’ve been looking for a home at a certain city center or a specific area that’s starting to feel out of your price range, you may wanna try looking a little farther out in a location that could be a little more affordable.
Expanding your search location or reprioritizing the items on your wishlist can open up opportunities you hadn’t considered and that could help you afford more of what you need in a home.
Number two, explore alternative financing options. Many buyers are exploring different mortgage options that have lower interest rates than the traditional 30-year fixed mortgage. A lot of our buyers are getting adjustable rate mortgages or doing the 2-1 interest rate buydown that sellers are paying for.
In those situations, interest rates are lower for a few years making the home temporarily more affordable. The end goal is to refinance the home in a few years when rates come back down and lock in on lower payment permanently. These loan products aren’t for everyone. But, for our buyers that have been using them lately, we’re seeing monthly mortgage savings of a thousand dollars a month or more.
We don’t think that rates are gonna get back down to the 2-3% range probably ever again, but we do think that something in the forwards is certainly reasonable within the next 12-18 months. This can buy you some time and save you thousands of dollars until rates come back down.
Tip number 3, explore the hometown heroes program. The state of Florida has a grant for up to 5% of the purchase price not to exceed $25,000, for frontline workers. There are over 100 professions that qualify such as veterans, cops, firefighters, teachers, and tons more. This money can be used towards your down payment, closing cost, or both. This is one of the best programs in the market right now for those that qualify. And while this might not make your mortgage payment cheaper, it can help those buyers who’ve been having a hard time saving up a downpayment with rising prices and costs to getting to good homes.
The bottomline is, if you’ve been searching for a home and found yourself stepping out of the process because you’re worried about rising costs, let’s connect. Having a team of local advisors on your side may be just what you need to get your home search into a more affordable direction.
Posted by Andy Mandel on