With inventory loosening and prices slowing, buyers’ chances look promising—but as mortgage rates rise, how great are their odds, really?
At the current rate—and if a buyer keeps to the 30 percent threshold—56.5 percent of listings would be within their price range. At 6 percent, the amount falls to 48 percent. Does this mean waiting is wise? Likely not. Budgets can be flexible, and so are housing indicators. While crunching the numbers is vital, so is considering your lifestyle and needs, says Aaron Terrazas, senior economist at Zillow. “While it’s certainly important to keep track of home values and interest rates and plan your budget accordingly, buyers shouldn’t base their decisions on those moving targets,” Terrazas says. “A home is the most valuable asset that most people will ever own, so it’s especially important not to gamble with it. In the end, the best time to buy a home is always when the time is right for an individual buyer—often when they’re financially ready, when they’re relocating to a new area or a major life event requires them to upsize or downsize. “It’s also important to remember that rates on a typical mortgage remain very low by historic standards—especially given the type of strong economic growth we’ve been experiencing,” says Terrazas.
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