Good News On Today’s Mortgage Rates

By Alyssa Morrison |

One of the first considerations on a home buying journey is mortgage rates. Shifting mortgage rates have dominated headlines since April, yet even with rates more than double where they were a year ago, there are still advantages to locking in a rate today.

“As a buyer, right now is a great opportunity to make an offer on the house of your dreams,” says Regional Vice President of Caliber Home Loans Luke Easterly. He still believes it’s a great time to buy a home, even if rates are up now and may come down as early as 2023.

Home sales have slowed significantly year over year. But homes are still appreciating, which continues to assure that real estate is a solid investment.

There has been less real estate activity because whether buyers or sellers are consulting the stock market or watching interest rates, there has been trepidation surrounding the current economic picture.

Still, it could get more difficult to secure a home in the months and years ahead, and it’s not because of interest rates. Easterly points to the forecasted projection of new homes being built and added to the market. New construction for condominiums and single-family houses has slowed due to supply chain slowdowns and the rising cost of supplies. That means that when rates fall, there will again be fewer homes available to buyers.

Of course, there’s rent. While home prices have escalated amid the seller’s market of the past few years, rent has escalated significantly too. Apartment List tracks rent growth in Seattle and across the metro area. Rent is up 9.1% from this time in 2021, and is in its sixth straight month of increases. April saw a near 20% year-over-year increase.

“Rent keeps going up, and there are people out there who may not want to enter the market, but may be willing to pay thousands to rent. And it could be cheaper to buy,” says Easterly.

What’s more is the advantage of buying in the market now: less competition. In early 2022, frenzied buyers found themselves competing against each other and driving home prices up anywhere between 110% to 140% of the list price of a home. Now, buyers can enter the market and search for a home, and the likelihood of facing five or 15 competing offers is significantly less.

Buyers may still be asking about that interest rate. If we wait it out, will it go down eventually?

Sure, says Easterly, but you can put an offer in on your dream home now and when rates go down, the buyer could refinance for the lower rate. “This is not your forever mortgage, you may be able to refi (refinance) in the next 12 months at mid to low 4%. Go make an offer on the house of your dreams, looking at this as a temporary loan.”

RSIR’s quarterly reporting still observed a seller’s market, despite the rising interest rates. That means now may be an ideal time to enter the real estate market, whether you’re a buyer or a seller.

“I still believe it’s a great time to buy,” says Easterly. “I really do.”