Secure your mortgage rate now: A late summer rate hike will impact homebuyers – Emilio DiSpirito

By Emilio DiSpirito, Realtor and Co-owner of Engel & Völkers East Greenwich and Engel & Völkers Barrington East Bay

In today’s real estate market, prospective homebuyers face a unique set of challenges. With pent-up demand and limited housing supply, finding the perfect home has become increasingly competitive. However, there is an additional factor that potential buyers should consider carefully: the anticipated rate hike by the Federal Reserve late this summer. In this article, we will explore why locking in your mortgage rate now is a prudent decision, given the impending rate increase and its potential impact on monthly housing costs.

Many of our buyers have overcome the initial “sticker shock” of the current rates, while others are waiting on the sidelines, anticipating a “real estate crash” or expecting rates to decrease in the near future. However, this is unlikely to happen. It is more probable that costs will increase for these buyers. Therefore, I hope they utilize the information provided here to save a significant amount of money and secure the home they desire.

1. The Likelihood of a Rate Hike:

The Federal Reserve plays a crucial role in determining the direction of mortgage interest rates. Based on recent economic indicators and statements from policymakers, there is a growing consensus that the Fed will raise rates in the coming months. By acting now, buyers can secure a lower mortgage rate before any potential increases take effect.

2. Impact on Monthly Mortgage Payments:

Rising interest rates can significantly impact the affordability of a home. Even a slight increase in rates can result in a noticeable increase in monthly mortgage payments over the life of the loan. By locking in a lower rate now, homebuyers can secure a more favorable monthly payment, potentially saving thousands of dollars over the long term.

3. Escalating Housing Prices:

The combination of pent-up demand and limited housing supply has led to rising home prices in many markets. If interest rates increase, it could further fuel the upward trajectory of housing costs. By acting swiftly and locking in a mortgage rate now, buyers can potentially secure a more affordable monthly payment, safeguarding against future price increases.

4. Future Rate Predictions:

Financial experts and economists suggest that the Federal Reserve may continue to raise rates gradually in the foreseeable future. By locking in a mortgage rate now, homebuyers can shield themselves from future increases, providing financial stability and peace of mind.

5. The Benefit of Certainty:

In an uncertain market, having a fixed mortgage rate provides buyers with stability and predictability. By securing a rate now, buyers can confidently plan their budgets and financial goals, knowing their monthly mortgage payments won’t fluctuate with any subsequent rate hikes.

6. Impact on Higher Price Ranges and Increased Competition in Lower Price Ranges:

While rising interest rates affect all homebuyers, those in higher price ranges may face additional challenges. As mortgage rates increase, the affordability of homes at the higher end of the market may diminish. Buyers in these price ranges may need to reassess their budgets and consider seeking lower-priced homes to accommodate the higher mortgage ranges.

This shift in buyer behavior can potentially intensify competition in the lower price ranges, specifically among first-time buyers and those looking to downsize. As buyers in higher price ranges start exploring more affordable options, the demand for homes in these lower price brackets will likely increase. This heightened competition can lead to multiple offers, bidding wars, and a reduced inventory of available homes.

For first-time buyers and those looking to downsize, this scenario poses a unique challenge. Limited housing supply combined with increased competition may make it more difficult to find a suitable home within their desired price range. It becomes crucial for buyers in these categories to act swiftly, work closely with real estate agents, and be prepared to make competitive offers to secure their desired property.

However, despite the intensified competition, locking in a mortgage rate now can still benefit buyers in lower price ranges. By taking advantage of the current lower rates, they can ensure more affordable monthly payments and protect against potential future rate increases. Moreover, being well-prepared with pre-approval letters, understanding the local market conditions, and working closely with a knowledgeable realtor can give buyers an edge in navigating the competitive landscape.

The current real estate market, characterized by pent-up demand and limited supply, presents a unique opportunity for potential homebuyers. However, with the anticipated rate hike by the Federal Reserve this summer, buyers should act swiftly to lock in their mortgage rates. By doing so, they can secure a more favorable monthly payment, protect against future rate increases, and ensure financial stability in an ever-changing market. Don’t wait and risk higher monthly costs for the same home; take advantage of the current rates and secure your dream home today.

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To read more articles in RINewsToday by Emilio, go to: https://rinewstoday.com/emilio-dispirito/

Phone: 401-359-2338 – Email: [email protected]

Instagram: @EVRhodeIsland – Website: EastGreenwich.EVRealEstate.com

Emilio DiSpirito

If you would have asked me what I wanted to be growing up, little Emilio would have told you “an archeologist” or “an architect” despite the fact that at age 8 I had my first lemonade stand, landscaping business and was recording my first “news show” on my boombox!  Well, I never was much good at trigonometry and did could not see myself traveling for months and possibly years at a time, so becoming an architect or archaeologist clearly did not happen!

Fast forward 26 years later and I’m running a team of the finest residential real estate professionals, own a media company and host my very own radio news show about real estate!

For 7 years straight it seemed that I had put in more hours than the day had to give on my real estate business. 7 days a week, 14 to 16 hour days, without a break! Why? My friends and family did not understand the sheer magnitude of moving parts and services we offer to our clients during a transaction! One slip up or one missed call could mean make or break for someone’s dream home or even a lost deposit!

Running a team of like-minded, highly qualified and capable professionals has allowed me to offer a very streamlined, simplified and efficient approach to the sales process for our clients and allowed me to earn personal time again with my family while not missing a beat for my clients!

When I’m not working, I’m with family and friends, riding my mountain bike, eating at local restaurants, enjoying live entertainment, hiking, skiing or reading!