![]() This is especially true given that as of now the conflict in Ukraine hasn’t seemed to have had an earth-shattering economic impact on the U.S. He added, “As things stand, even in the face of what’s going on in Ukraine, I still believe that the longer-term trend for mortgage rates this year will be an upward one. “Heck, there’s still a lot of uncertainty about how a new Covid variant could end up impacting the economy.” “Ultimately, nobody can predict the future, and there’s still a lot of uncertainty about how the Russian invasion of Ukraine will end up impacting the U.S. Being stuck in a home that you can’t afford or don’t want to live in can be worse than taking your time and potentially ending up with a slightly higher interest rate. However, if you’re not in a position where you can comfortably afford a home or where you’re unsure if you want to be a homeowner, it may not be the best idea to buy right away. With mortgage rates rising, you might feel pressure to rush into buying a house so that you can avoid paying higher interest. ![]() If you’re worried that you won’t qualify for a traditional 30-year, fixed-rate mortgage, you may still find that you can get approved for loans from places like the Federal Housing Administration or the Department of Veterans Affairs.ĭon’t rush. Not all lenders have the same mortgage requirements. ![]() The lower your rate, the less money you’ll need to spend on housing costs each month and the more expensive a home you’ll be able to afford.”Ĭonsider different loan options. economy.”Ĭhannel said, “By shopping around and making different lenders compete for your business before you get a mortgage, you may be able to secure a lower interest rate than you would have had you gone with the first lender. “This is significantly higher than the record lows of under 3% that we saw during the height of the pandemic, and even higher than what it was in January of 2020 before the pandemic really started to have a major impact on the U.S. “Even accounting for this recent decline, the average 30-year, fixed mortgage rate is still sitting at 3.76%,” he said. Channel said that although rates have recently fallen, the longer term trend since January is that they’re on the rise. But by keeping the following tips in mind, homebuyers might find dealing with the market less daunting than they initially expected. With high prices, rates rising over the last few months and a limited number of homes available for sale, it can be tricky for buyers to navigate today’s housing market. Meanwhile, high vacancy rates and low home prices might mean an area is experiencing socioeconomic hardships. On the flip side, Channel said high vacancy rates and high home prices can suggest that an area has unique characteristics, such as being a vacation hot spot or targeted by investors. “If vacancy rates are low and housing prices are high, it could signify that the market is highly competitive and that lower-income people might have a problem finding a house.” “For example, if both vacancy rates and home prices are relatively low, it could mean that sellers are parting with their homes for less money than they could have potentially gotten,” he said. Understanding an area’s vacancy rate can help shed light on how buyers and homeowners behave.” “But that doesn’t mean that vacancy rates are unimportant. “Because of this, vacancy rates alone can’t fully explain why homes are so expensive,” said Channel. He said this means there are many other factors in play that help dictate home price, like location, the kind of rates being offered to borrowers, square footage and the reasons why homes are sitting unoccupied - to name a few. For example, the median home price in Alaska - the state with the third-highest vacancy rate - is about $12,000 higher than the median home price in Oregon, where vacancy rates are the lowest in the nation.” “Because of this, it may be tempting to blame the current hot housing market solely on an overabundance of vacant homes on the market,” Channel said, adding: “As is often the case when economic theory unfolds in real life, this theoretical framework doesn’t always hold. The inverse would also be true where a low vacancy rate would signify a strong demand from buyers, less supply on the market and higher prices.” “In other words, a high vacancy rate would signify a lack of demand from buyers, which in turn would result in a larger supply of homes on the market and lower prices. “In theory, vacancy rates should have a strong inverse relationship to home prices,” said Channel. Channel said that there are several notable instances where a state’s median home price and its vacancy rate can both be relatively steep. Though areas with higher vacancy rates are often less expensive, that isn’t always the case.
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