To buy a house ? Prepare for the interest rate shock –
(KTEN) – Nationwide mortgage interest rates between 6 and 7% can be daunting to potential buyers, but higher mortgage rates mean lower initial home prices.
“So the good news for buyers is that they have to pay less for the house,” said Michelle Castle, director of Guild Mortgage. “The bad news for buyers is that the interest rate is higher.”
Interest rates have been rising over the past two years, and inflation has also added to the shock of buying a new home.
“If you were to take everything that increased incrementally during inflation and compare it to interest and compare it to the actual rise in interest rates, our interest rates haven’t increased as much as everything else,” Castle said.
Savvy buyers can work with sellers to get a lower than quoted price due to a recent downturn in the housing market.
“Sellers are ready to negotiate; sellers are ready to buy people’s interest rates,” Castle said. “Six months ago, I mean, a seller wouldn’t even negotiate. Just take the house as is.”
Potential homeowners also benefit from the area they are buying from – areas like Texoma.
“People were paying $80,000 to $100,000 more than the asking price,” said real estate agent Tommi Sue Homuth. We didn’t have that here; they didn’t pay much more. They were in Frisco, McKinney, Dallas…those neighborhoods.”
Castle and Homuth warn that these high interest rates aren’t going to come down any time soon, as the Federal Reserve continues to fight inflation.