Interest rates are rising. The Federal Reserve is determined to take on inflation, and that means rate hikes. Interest rates for a 30-year fixed-rate mortgage are now an upwards of 7%, and nobody knows when or if the increases will stop. With so many unknowns, you’re probably left wondering: should you wait for mortgage rates to fall before buying a home? The short answer is no, and here’s why:
Is It a Good Time to Buy a House in NJ?
If you have a decent credit score, a down payment, and feel financially secure, then yes, right now is the best time to buy a house in NJ. Interest rates are rising and will likely continue rising. This means the longer you wait, the more you’ll end up paying for your NJ mortgage. You can always refinance your home if rates fall in the future. But you can’t go back in time to lock in today’s rates.
Also, rent prices in New Jersey are increasing at an alarming rate. Renters are paying more than ever, and it’s money that goes into landlords’ pockets. The sooner you purchase a home, the sooner you can start investing in property and building wealth. Thinking about applying for a mortgage loan? Here’s what you should know before you apply.
Will Mortgage Rates go Down Again?
Even top economists can’t predict whether mortgage rates will go down again in the future. Some experts believe 7-8% rates will become the new normal, and it’ll be a long time before we see them in the 3-4% range again. Even without a crystal ball, it’s safe to assume we’ll continue to see rate hikes as the Federal Reserve attempts to lower inflation.
What is the Current Mortgage Rate in NJ?
Mortgage rates change weekly, but you can check out today’s mortgage rates in New Jersey on Zillow. Not sure what your home loan will look like? Use our nifty mortgage calculator to find out exactly how much you’ll pay in principal, interest, and taxes every month.
Should You Wait to Buy a Home?
Waiting for the housing market to burst? You’re not alone: three out of four buyers and sellers believe a housing bubble exists. It’s easy to see similarities between today’s housing market and the 2006 market right before it crashed, but the two are very different. Before the Great Recession, the housing market was rampant with predatory lending practices–like balloon payments– and overly lax lending. This allowed people to over-extend themselves financially, and many bought properties they weren’t even living in. When the recession hit, the over-extended couldn’t make their mortgage payments, and the market crashed.
On the other hand, today’s housing market is an entirely different situation. National housing supplies are at historic lows, yet demand for homes continues to rise. As more people work remotely, the need for home office space grows. Also, millennials have aged into the prime home-buying age, placing more strain on an already tight housing market. Even if a recession hits, it’s unlikely banks are left with properties they can’t sell.
So, will the housing market burst? Economists are doubtful, and most expect the market to stay strong for at least the next five years. With more stringent lending practices and 30-year fixed-rate mortgages the norm for the past decade, borrowers are less likely to default on their loans.
How to Buy a Home When Interest Rates are Rising
Don’t let the idea of rising interest rates and a tight housing market scare you off. With patience and compromise, you can find the perfect home for you. Here are some tips for finding the right home in the NJ housing market:
- Consider all housing options. Condos and townhomes are great options if you don’t need lots of space.
- Expand your search. If you work remotely, look at homes outside of popular metropolitan areas.
- Research new construction. Look into new housing developments. You may have to wait longer to move into your new home, but there’ll likely be less competition.
- Don’t give up. Houses are put up on the market all the time. The perfect home for you could go up on the market tomorrow.
- Work with an experienced realtor. Find a realtor who is knowledgeable about the area you want to move to and has access to a vast professional network.
Work with New Jersey’s Top Real Estate Company to Land Your Dream Home
Having the right team by your side makes all the difference. Casa Real Properties has years of experience connecting buyers like you to perfect homes across New Jersey. Whether interest rates are high or low, their experienced real estate agents can help find the mortgage loan that works for you. Contact us today to get started on your home-buying adventure.