It’s no surprise the average American is experiencing the effects of inflation in their everyday life. Everything from groceries and gas to rent has seen an uptick in price due to the shift in the market – creating an unfortunate reality of inescapable rising prices. At Soundbuilt, we have a new reality to consider to help combat the rising cost of living – stabilize your biggest monthly expense, your housing cost, by purchasing a home with us.
Rising Mortage Rates
According to The Mortgage Reports, the recent mortgage rate hike is the largest in 22 years. As the Federal Reserve fights against inflation caused by everything from the Russian Invasion of Ukraine and China’s COVID lockdowns to supply chain issues, the central banks are taking measures to offset this pressure with the rate increase. Even though the Federal Reserve does not determine mortgage interest rates, rate movement is closely correlated with the Fed’s policy actions.
Historical Mortgage Rates
At the start of the year, a 30-year fixed loan rate was 3.29%. It is now 5.57%. That may seem astronomical, but when viewed through a 30-year historical lens, the rate is still significantly below the 7.78% average since 1971. News reporters love to sensationalize and focus only on the immediate increase, leaving consumers overwhelmed and discouraged. It is important to look beyond the hype so you can weigh the benefits of homeownership against the current rate trend.
Competition for Homes
One of the biggest drawbacks to purchasing a home over the past few years has been the scarcity of available homes and the competition from investors. The low rates caused an influx of buyers without the supply to match, generating bidding wars and homes selling considerably above asking prices. Increasing mortgage rates levels out the playing field and gives first-time homebuyers a better chance of winning the bid for their future home.
2022 Rent Increases
According to rent.com, the national aggregate rent increase has surged 22.2% year-over-year. The average rental rate increase for the 1st quarter of 2022 is 30.53% in Seattle. That puts a 2-Bedroom unit at an average rent of $3,521/month. The rise in rent is predicted to outpace home sales prices this year, and in almost half of the nation’s largest markets, first-time home buying is more affordable than renting. The previous surge in demand brought by low mortgage rates made it especially hard for first-time buyers to purchase a home and made renting a more palatable option. Now, the shift in ever-increasing rents and greater availability of homes tips the balance.
Maintain Housing Expenses With a Fixed-Rate Mortgage
With a Fixed-Rate Mortgage, your home loan has a specific interest rate for the entire loan term. Your interest and principal payments will remain the same each month. James Royal, Senior Wealth Management Reporter at Bankrate.com, says, “A fixed-rate mortgage allows you to maintain the biggest portion of housing expenses at the same payment. Sure, property taxes will rise, and other expenses may creep up, but your monthly housing payment remains the same.” Considering that the current rate is still 2.21% lower than the 30-year historical average, having the interest stay the same will make budgeting easier and protect you from the higher rates forecasted to come.
Current Rate Buydown Promo
If all of the above factors work in your favor, we also have a Rate Buydown Promo Special to sweeten the deal! We are offering a $10,000* Incentive for Spring Buyers. Soundbuilt Homes and its Preferred Lenders have teamed up to combat the interest rate hikes and rising monthly payments. We are offering $10,000*, and our Preferred Lenders are offering 1% of your loan amount to noticeably buy down your interest rate. This offer is only available to our VIP Priority List members and for homes that close by August 31st.
Is Now the Ideal Time for You?
The perfect time to buy a home is different for every person. There are numerous factors to consider, from what’s going on in the market to your personal finances and credit history. With historically low interest on the rise, less competition from investors, and skyrocketing rental rates, now may be the ideal time for you. Get preapproved with our preferred lender and get yourself on the VIP Priority List today.
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