MINT HILL, NC – With both home prices and mortgage rates going up, it’s time to look at what’s going on with the housing market right now. These two factors are putting a squeeze on housing affordability for many. Here are a few things you should know about the housing market current.
Mortgage Rates Might Continue to Go Up
Buyers are stuck in a bit of a catch-22 right now. The mortgage rates are up and so are home prices, but waiting to buy will likely mean even higher mortgage rates.
In June, the 30-year fixed mortgage rate went up to about 6%. This same rate was about half that a year ago. It went down a little bit recently but it could continue to climb through 2022, as well.
An ARM Might Work but Could Be Dangerous
Many buyers might use an ARM or adjustable-rate mortgage to buy a home. While this might make the home more affordable, right now, it can make the home incredibly expensive in the future.
An ARM will give you a fixed mortgage rate for three or five years. Then, the rate can adjust once you are done with that initial period. This might give you a lower rate now, but you could end up with a much higher rate later. If you don’t plan on staying in your home for very long, this might be an option. Or you can re-finance later on to get a fixed rate.
Institutional Buyers Will Become More Competitive
When mortgage rates go up and affordability drops, it’s very common for institutional buyers to become the competition for first-time buyers. They come to the table with cash or with strong financing and compete for the same homes lower-income buyers are looking for.
The Market is Cooling Off
Home prices are still going up, but they are going up at a slower rate. Inventory is rising, which likely means the market is starting to cool off. While it’s still a pretty hot housing market, signs of the market cooling off are becoming more common.
There are many things to know about the housing market right now. These are just four main things going on right now in the housing market across the country.
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