Mortgage interest rates are up, why aren’t you buying a home right now? Did you know that you’ve lost over 10% of your buying power with interest rates up 1%? Yes, that’s correct – 10%. Ouch!
If you were pre-approved for a loan of $800,000 your buying power is now 10.75% less than it was when you were pre-approved. That’s a whopping $86,000 less affordability for you and that’s a lot of money to try to make up in the market we’re dealing with in San Mateo County.
In this kind of a volatile mortgage market you must get yourself pre-approved by your lender each time rates change upward and have a serious chat with her/him about your buying strategy in this kind of market. Don’t forget to include your agent in this conversation because you are a team working together to help you achieve your goal of buying a home.
The day of the 3.25% rate is gone, my friend. We knew it would be coming but didn’t quite expect it to happen so fast. Hang on to your hat, and get serious about buying. Perhaps this change in rates will move some of the competition out of the market. We can only hope.