Should Higher Interest Rates Scare Away Denver Homebuyers?
October 11, 2018
This October, Wall Street is certainly getting spooked by rising interest rates but what does this mean for potential Denver homebuyers? Should they should they be scared away the Denver real estate market?
Many economists agree that mortgage rates will peak around five percent this year but historically, this is a low rate. Mortgage rates were above the 10 percent mark in the 1980s and fluctuated between six and eight percent in the 1990s. Now, these are scary numbers!
While rising interest rates certainly aren’t ideal for the real estate market, it doesn’t mean that Denver homebuyers should be scared away from purchasing a Denver home.
Here are a few things to consider:
- Since interest rates are on the rise, now might be a good time to accelerate your home buying plans in case interest rates rise even more.
- As interest rates rise, some buyers may leave the market, possibly meaning there could less competition for your dream home.
- If you have more cash to invest in a home, this is one way to mitigate the rising interest rates. You can use the cash to invest in a larger down payment, reducing the size of the loan. Or, you might consider paying discount fees to reduce your interest rate.
- Now is the time to focus on improving your credit score since buyers with higher credit scores are given the most favorable rates.
- Always keep rising interest rates in perspective. For example, a half-point increase on a loan of $300,000 would only amount to an additional $90 per month, which hopefully, isn’t a deal breaker for your dream home.
The Denver real estate market has remained strong in recent months and will likely remain strong. A Denver home is a fantastic financial investment even with a higher interest rate. For information on buying a Denver home amid rising interest rates, please contact Andrea Webber at (303) 475-7057. I would be happy to offer insight into the current market or recommend mortgage lenders to help you through this process.