Putting Interest Rates Into Perspective

I was working with a buyer last year and when she started the process, she was looking at rates around 4%. As we began working together, the rates began to increase and she pressed pause on the search (like many did as 2022 came to a close and rates creeped up).

We started working together again this spring when rates were over 6%, but she was ready to go. I asked her, “what got you over the hurdle of the higher interest rate?” Her response, “my lender told me, don’t worry about the rate if you are okay with the payment?” Getting caught up on that higher rate is easy to do especially given the low rates we saw in 2020 and 2021, but breaking it down from what she could afford based on monthly payment, and avoiding getting too caught up on the rate alone put it all into perspective for her.

Historically, rates over the past 30 years have been 6%. When I purchased my first home in 2000, the rate was 8.25% (ouch!) but I do remember refinancing that mortgage less than 2 years later to about 6% and being thrilled.

So I go back to perspective, yes, we all want rates under 4%, I know I do! Look at the full picture and what works best for your circumstance. The rates will fluctuate as they have for the past 30 years but don’t let that stop you from investing in homeownership!

Previous
Previous

Questions to ask a realtor when looking to sell a home

Next
Next

Fun Facts about music city