Rising interest rates could scare away potential buyers
The hot housing market may be cooling, but interest rates are soaring.
In fact, they’re now at their highest level since 2008, which could put off many potential buyers.
Realtor Robin DiGirolamo says if someone is in the market to buy or sell a home, they shouldn’t be left on the sidelines.
“With interest rates at 6%, what is that compared to? Millennials are now facing 6%. When I bought a house, it was 14%,” says DiGirolamo.
She says anyone deciding to buy or sell a home should always consider interest rates, but it’s all about perspective. She adds that the benefits of selling or buying now should also be considered.
“Rents are at their highest ever, so we always say when you buy your house, you pay your own rent, you pay yourself, you are the landlord. When you rent from a landlord, you are paying their mortgage,” says DiGirolamo.
For others like Angela Favale who is buying her first home, her decision to buy in this climate was simple.
“It was just the moment,” says Favale, but admits the decision to make this decision was not easy. She and her husband have waited years, she says, but they just have to get started.
“Even after accepting the offer, it was one of those headaches [days]. One day you’re excited and happy, the next day you’re nervous,” says Favale.
Although Favale is ultimately happy with her decision, the numbers don’t lie.
This week, applications for mortgage loans fell by nearly 30% compared to the same date last year.
For those looking for options on Long Island, there are less than 7,000 homes for sale right now after a busy summer of shopping.
So DiGirolamo is telling potential buyers to brace themselves.
“You need to have pre-approval ready. Ready to go, you need to know what you’re comfortable buying and that way when something hits the market, you almost have the right of first refusal. “, explains DiGirolamo.
Another figure that stands out is that mortgage refinance applications are 83% lower than this time last year, which means a lot of people are definitely on hold.