If you're thinking about buying a home, you may be concerned about the impact of higher mortgage rates. It's true that rates have been on the rise, with the average rate for a 30-year fixed-rate mortgage reaching 3.18% as of April 2023. However, despite these increases, homebuyers are still taking action in the real estate market. In fact, there are several reasons why higher mortgage rates aren't stopping people from pursuing their homeownership dreams.
First, it's essential to understand that while rates have increased, they are still historically low. The current rate of 3.18% is still lower than the average rate of 6.41% over the past 20 years. This means that homebuyers are still able to take advantage of favorable rates, even with the recent increases.
Furthermore, the demand for housing continues to outweigh the supply, creating a highly competitive market. This has led to increased competition among buyers, with many willing to pay higher prices and accept higher mortgage rates to secure a home. According to the National Association of Realtors, existing-home sales increased by 1.9% in March 2023, representing a seasonally adjusted annual rate of 5.67 million. This suggests that despite the higher rates, homebuyers are still actively pursuing homeownership.
In addition to the shortage of available homes, there are several other factors at play that make buying a home more attractive, even with higher rates. For example, many people are still working from home, and as a result, they may be looking for more space or a better location. Buying a home may even be more affordable than renting, especially in areas with high rent prices.
Furthermore, the overall economy is performing well, with low unemployment rates and rising wages. This economic stability may make buyers feel more confident in their ability to make mortgage payments, even with slightly higher rates.
It's also worth noting that higher rates can actually work in favor of homebuyers in some cases. For example, if rates continue to rise, it may motivate some sellers to lower their asking prices to attract buyers. This could create opportunities for buyers to find a home at a more affordable price.
At Kwon Home Group, we understand the complexities of the real estate market, including the impact of rising mortgage rates. Our team of experts can help guide you through the buying process, from finding the right home to securing the best mortgage rate. Don't let the fear of higher rates keep you from achieving your homeownership goals. Contact us today to learn how we can help you find your dream home at a price you can afford.