Helping you buy and sell real estate in Boulder County and beyond
Interest rates are a huge topic in the Colorado housing market. The last few years saw historic lows in the 2-3% range; however, in the Summer of 2022 we saw them climb into the 4-5% range. Now we're seeing rates in the 6-7% range! Yikes. But don't let this scare you.
With rising mortgage rates and
fluctuating home prices, knowing when to buy a home can be tricky. If
you find a home that you love, and can see yourself staying in for years to come,
you don’t have to delay. Look at the house as a long term investment. Similar to a marriage. But the interest rate doesn’t have to be a lifelong commitment. This approach is known as “marry
the house, date the rate”.
Some things to think about:
Real Estate is a great investment over the long term. There’s a
reasonably good chance that your home’s value will rise over time. For
example, if you purchase a home for $500k and it appreciates 10% over
three years, your home is valued at $50,000 more than the purchase
price. That 6% rate doesn't seem so bad when you consider how much your home will appreciate.
There are ways to get a lower rate, such as getting a rate buy down. In many cases, the seller could help with the rate buy down or
perhaps a family member could gift you with the extra cash needed at
closing to get your payment down to a manageable amount.
Remember that rates fluctuate -- If you found the home of your dreams, you can go ahead and lock in at the current rate and plan to refinance once rates decline. (Typically a 1% reduction makes it worth while).
If you're renting, but waiting for rates to come down, you could be waiting for a long time. And by then home prices could start going up again.
If you have found your dream home, don’t let the interest rate scare you away. Give me a call so I can play matchmaker!