Navigating the Home Buying Market When Mortgage Rates Spike

Rising mortgage rates, along with limited inventory and record-high home sale prices, will affect the ability of home buyers to purchase a home. 

The Fed is also winding down buying mortgage-backed securities (MBS) and US Treasuries, which it purchased during the pandemic to stimulate the economy. 

Potential homebuyers should look to buy earlier in the year rather than later, to take advantage of lower rates. 

For most of 2021, 30-year mortgage rates averaged around 3%, but they've inched up every week since we entered 2022. 

The Mortgage Bankers Association believes that with the expected increases in rates, 30-year mortgages will be closer to 4% by the end of 2022.  

The resulting higher monthly payment may price some buyers out of the market. 

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