“I am part of a whole generation of people used to low rates,” she said. “If and when it normalizes to a long-term average, people my age will be relatively unhappy.”
Is there any reason for me to rush into all of this?
No, even if the number of purchases has spiked recently.
Ms. Ponder doesn’t necessarily advise people to stay out of this market, although she does want people to be financially stress-free. Financial planners – and lenders – often want people to spend no more 35 percent or more their income on the total cost of housing. Most people should resist the temptation to push those boundaries; Mrs. Ponder often wants her clients to be shorter than them.
And remember: Calculating a mortgage in a higher-interest rate environment can’t really be so terrible as long as the bank keeps lending you.
A $300,000 30-year fixed-rate mortgage has a monthly payment of $1,432 if the interest rate is at 4 percent, which is close to current levels. At 6% – clearly the highest rate in more than 13 years – the payout would be $1,799. An extra $367 a month is hardly a change in the pocket, but it’s an amount many people can still squeeze out of a budget.
Still worried? Remember that playing along is not a requirement. Being a tenant is not a standard for life satisfaction. And in some cases, buying a home in an environment like this is one recipe for regret.
“The most important thing is to make sure you are willing to stay for at least 5 years,” Daryl Fairweather, Chief Economist of Redfin. “Whatever happens in the market, you should gain enough equity so that when you sell you’re ahead, even after paying the fees.”
So maybe this is not the time to be careful. But it is definitely a bewildering thing.
“What worries me is that people are starting to act irrationally when trying to vie for a house they don’t really like,” Dr. “The worst case scenario is you buy it and end up selling it in a year. If the market goes down, you could be in a really precarious position. “
https://www.nytimes.com/2022/02/18/your-money/federal-reserve-mortgage-rates.html Interest rates are rising. What if you want a house?