Mortgage rates have been on the rise in recent months, reaching the highest level in over two decades. This is due to a number of factors, including inflation, the Federal Reserve’s interest rate hikes, and the global economic uncertainty.
As of October 1,v2023, the average interest rate for a 30-year fixed-rate mortgage is 7.77%, according to Bankrate. This is up from 6.95% at the beginning of the year. The average interest rate for a 15-year fixed-rate mortgage is 6.94%, up from 6.25% at the beginning of the year.
What does this mean for homebuyers?
Rising mortgage rates make it more expensive to borrow money to buy a home. For example, if you are looking to buy a home for $300,000 and put 20% down, with an interest rate of 7.77%, your monthly mortgage payment would be $1,723 per month. A $300,000 loan with 20% down at a 3% interest rate would be $1,012 per month. That is a difference of $711 per month. These tw0 examples just shows the difference in principal payments and does not reflect other factors like insurance, interest, or taxes.
For sellers, rising mortgage rates may make it more difficult to sell their homes. This is because fewer buyers will be able to qualify for a mortgage, and those who can qualify may be able to afford less.
How to digest the latest economic news?
No matter if interest rates keep rising or if we end in an economic collapse, I would suggest to keep a budget. A proper budget can help you through the thick and thin and should keep you at peace no matter the economic situation. One of the reasons of my hiatus from writing weekly blogs was for me to stop and look and my budget more closely. I put up a white board in my office at home, wrote out my debts and assets, and put up some motivational quotes on there as well. This is a daily reminder that I get to look at and focus on each and every day.
Final Thoughts!
Over the last few weeks, I have been able to look at things more closely in my life. I’ve been making a few shifts here and there to try and get me closer to my goals. My wife and I started working out again, been eating a slightly (still working on it) healthier diet, and been making some other changes in my life.
If you have ever heard of quotes like, “Live today how others refuse to live, so that one day you can live how others won’t” or “Get comfortable with being uncomfortable” then you will understand how my mindset has been these last few weeks. These two quotes are on my white board that I get the pleasure of looking at everyday. These are the foundation of my mindset. This helps me form a budget, be conscious of my spending, and think about how I want my future life to look like. No matter what adversity comes, I will always be ready, because I have a plan.
Alright, and since it is October 1st, we should do a Halloween joke!
Why couldn’t the skeleton go to the party?
He had no body to go with!
Alexander Kroening- REALTOR 