Buyers purchasing at today’s rates are facing quite an adjustment if they’d been pre-approved before mid-May. From the beginning of May until now rates have risen a full point, with a significant impact on affordability. The rapidity of the rise was indeed shocking. And of course many buyers are wishing they’d acted sooner. But it’s important for all of us to remember that while we got used to seeing rates starting with a 3, interest rates starting with a 5 are still quite wonderful historically. The following chart speaks volumes!
Obviously the rates available last year and in the first half of this year were the historic lows. We were told that over and over, and yet for some they became the new standard, as opposed to a short window of opportunity. I will date myself when I share that when I purchased my first home my options for a mortgage were between 16.75 fixed and 11.75% variable (I chose the variable, thank goodness!) For many years 7% was considered the golden number. It’s little consolation to buyers who could have purchased their home earlier this year at more gorgeous rates, or last year at both lower rates and lower prices. But historically these rates are still lovely!
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