CHARLOTTE — If you’re looking to buy a home, you’ve probably noticed – home interest rates keep going up, despite the federal reserve cutting interest rates at the end of 2024.
Consumer Advisor Clark Howard has the latest on what to expect from the housing market this year.
He recently spoke with Noah Ruffin, a home buyer in Atlanta, Georgia. Ruffin has been keeping a close eye on the housing market, hoping interest rates on mortgages would fall.
“You have to make a decision on whether or not you’re going to get it now or are you going to get in on the latter half of when home prices are already so inflated that it may not even make sense to,” Ruffin said.
People have been hoping against hope that mortgage rates would drop this year. But when the Federal Reserve cuts the interest rates it controls, it has virtually no effect on mortgage rates.
The only thing that matters is what inflation is like – and inflation has stayed stubborn. That’s why mortgage rates are still high.
Ruffin reached out to Maja Sly, who is an Atlanta-based realtor and affordable housing advocate. She said if you’re playing the waiting game, hoping to see those low rates again, you may want to reconsider.
“I tell them, good luck. Good luck, because you’ll be waiting for a very long time,” Sly said. “And then once you get there, you’re going to be paying above list price.”
Sly said don’t be discouraged. She said there are a lot of programs for first-time home buyers and government loans that can help lessen the financial burden.
“If you want to work with first-time homebuyers, you have to meet them where they are and they’re very payment-conscious – not price, it’s payment,” Sly said.
For Ruffin, he’s decided to move forward with buying his first home. He qualified for a Federal Housing Administration loan, which comes with much more affordable down payments.
“One other way you might be able to get a good deal on a mortgage, believe it or not, some people still have assumable loans where you can get the interest rate they have when they sell you their home,” Clark Howard said. “You may pay a little more because they know they got something you want, but it’s worth it.”
Clark also said your best source for a low-cost mortgage may be the home’s builder. He said they really want to sell the homes that they have money tied up in.
And many are offering the best mortgage rates in the market, regardless of what rate you have.
When inflation gets under control, mortgage rates will drop and you should be able to refinance.
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