“Mortgage rates this week jumped to their highest level since 2011, signaling a shift from a period of ultracheap loans to a higher-rate environment that could slow home price appreciation and squeeze first-time buyers.”
Laura Kusisto and Christina Rexrode, The Wall Street Journal, “Mortgage Rates Hit Seven-Year High as Ultracheap Era Ends,” May 18, 2018
The Takeaway: Interest rates are rising, and mortgage rates are slowly creeping up as well. That means affording a home and landing a mortgage will get a little more difficult.
A little perspective? Rates are still very reasonable (how many of us remember paying mortgages in the 8%’s or even in the double digits!).
We’ll all have to use more common sense when thinking about real estate. More is not always better, and don’t let watching HGTV (which we love, but still!) con you into thinking your first home needs to be your “forever home.”
Overspending on real estate can leave you house poor and way behind the curve when it comes to funding your future needs and paying for the experiences that make life worthwhile.
No reason to panic with higher mortgage rates, but do realize that you may need to downsize your expectations just a bit as you budget how much house you can truly afford.
Check out our previous article: Too Big? Too Small? How to Find the House That’s Just Right for You