How are buyers offsetting the effects of rising mortgage rates?
What should buyers do to compensate now that rates are rising? Today’s market remains very strong and while rates are definitely higher than they were last year, they’re still historically low. In the 90s, the average rate was 8.12%. In 2000, the average rate was 6.29%.
Buyers are using several strategies to offset rising rates, such as placing a larger down payment on the purchase. In Q1 of this year, buyers doubled the size of their down payments. Another strategy is to buy down the interest rate by paying extra at closing. Buyers are also using adjustable-rate mortgages. Last week, a 30-year mortgage averaged 5.53% while an adjustable-rate mortgage averaged 4.47%.
If you want to know what your rate would be now, I’d love to help you and connect you with a great lender. If you have any other questions, don’t hesitate to reach out to me by phone or email. I look forward to hearing from you.