At the start of May, the Federal Reserve raised interest rates for the 10th time since last March, but experts say that shouldn't deter you if you were looking to buy a home.
[Ads /]
"Buy the house now," says Sierra Pacific Fresno Sales Manager Paul Salazar. "You can refinance down the road, you can always do improvements to get more value out of your home, but you've got to get in the game."
Salazar says that the process should start with knowing and understanding your credit score.
"Get pre-qualified -- no real estate agent is going to take you to look at houses unless they know you are ready to buy," he said. "Everyone has a bump in the road -- it's about what you do after that bump in the road."
According to figures from the New York Federal Reserve, mortgage activity fell to the lowest level in almost a decade as interest rates rose.
Currently, the average mortgage rate for someone with good credit is around 7% (6.875).
It was half of that in 2019- 2021.
[Ads /]
"People are staying in their houses because interest rates were so low," Salazar said. "People don't want to go from a 2.5 to 3 to a 7 or 6.5."
That impacts inventory, meaning buying is more competitive, but money-saving moves include paying down debts or saving for a larger down payment.
"Getting their debt down low so it doesn't impact their debt ratios when it comes to buying a home," Salazar said.
Salazar says while it is a seller's market, that doesn't mean negotiations are off the table.
"What we're also seeing is sellers are willing to negotiate with buyers for closing costs," Salazar said.
[Ads /]
Buying new? Some builders offer discounts if using a preferred lender.
Once inflation cools or there's more stimulus in the economy, Salazar says mortgage rates will likely drop.
"We are looking to forecast maybe 2024, 2025 the rates around 4 percent," he said.
Making an extra mortgage payment each year could significantly reduce the term of your loan.
Having a 20% down payment isn't necessary, but saves you money over time as you avoid PMI costs.
For news updates, follow Vanessa Vasconcelos on Facebook, Twitter and Instagram.