Moses Alford

Mortgage Loan Originator

NMLS: 2020941

813-819-0222

moses.alford@alfordlending.com

Moses Alford Mortgage Loan Originator

Interest Rates Got You Worried? Here’s Why Buying Now Still Makes Sense!

Interest Rates Got You Worried? Here’s Why Buying Now Still Makes Sense!

When it comes to buying a home, one of the most common concerns I hear from clients is about interest rates. Many prospective homebuyers are hesitant to take the plunge, fearing that current rates are too high to make purchasing a home a wise financial decision. However, I'm here to share some insights that might just change your perspective. Let’s break down why now is still a great time to buy a home, even with the current interest rates.

First, let’s put things into perspective. While today’s interest rates might seem high compared to the ultra-low rates of 2021, they are still historically low. To illustrate this, let’s take a look at the average 30-year mortgage rates over the past few decades, based on data from Freddie Mac:

      1981: 16.63%

      1991: 9.25%

      2001: 6.97%

      2011: 4.45%

      2021: 2.96%

Notice the trend? Interest rates have generally been decreasing over the decades. Even though today’s rates are higher than the rock-bottom rates we saw in 2021, they are still significantly lower than what homebuyers faced in previous decades.

As of early May 2024, the average rate for a 30-year mortgage was 7.02%. While this is higher than the rates we enjoyed in 2021, it’s important to remember that it’s still relatively low when you consider the broader historical context. For example, in 1981, homebuyers were dealing with rates as high as 16.63%. Even in 1991, rates were over 9%. Compared to these figures, today’s rates are quite favorable.

Another key point to consider is the concept of refinancing. When you lock in a mortgage rate, you’re not necessarily stuck with it for the life of your loan. If interest rates drop in the future, you always have the option to refinance your mortgage to take advantage of the lower rates. This means that even if you buy a home now with a higher rate, you could potentially lower your monthly payments in the future by refinancing.

Additionally, there are other factors that make buying a home now a smart move. The housing market is constantly evolving, and waiting for the "perfect" time to buy can be a risky strategy. Home prices have been steadily increasing in many areas, and delaying your purchase could mean paying more for the same property down the line. By buying now, you can start building equity in your home sooner, which can be a significant financial benefit over time.

Moreover, owning a home provides stability and the opportunity to personalize your living space. Renting, on the other hand, often comes with uncertainty regarding rent increases and lease renewals. When you own your home, you have more control over your living situation and can create a space that truly feels like your own.

It’s also worth mentioning the emotional and psychological benefits of homeownership. Having a place to call your own can provide a sense of security and pride. It’s a place where you can build memories, put down roots, and create a stable environment for your family.

In summary, while current interest rates might seem higher than what we’ve seen in the recent past, they are still quite low when viewed in a historical context. The ability to refinance in the future, combined with the benefits of building equity, gaining stability, and creating a personal living space, makes buying a home now a smart move. Don’t let concerns about interest rates hold you back from achieving your dream of homeownership.

If you have any questions or need guidance on navigating the current market, feel free to reach out – I’m here to help you every step of the way!