Rates are on the rise, and you may be wondering what this means. Our preferred lender, Wes Sellew with Princeton Mortgage has some insight on increasing rates: “Mortgage rates have gone up a lot in 2022. A 6% 30 year fixed is not uncommon today, which is quite different than 3% which is where it was as the turn of the year. To put that in perspective, the monthly payment on a $500,000 mortgage at 3% was $2108 and at 6% is $2997. Rising inflation is one of the reason rates have gone up. The CPI index, which measures inflation rose 8.6% compared to 1 year ago which is the highest level since 1981. To combat inflation, the Fed jumped into action in March and began raising their benchmark rate, The Fed Funds Rate and most recently by .75% in June which was the largest increase since 1994. Mortgage Rates do not directly follow what the Fed Funds rate does. A better indicator for what mortgage rates are doing is to follow the 10 Year Treasury as well as the price of Mortgage Backed Securities (MBS). The Fed has a goal to get inflation under 2.5% by near which means there will be more rate hikes. While home values are not likely to go down, they will level off as buyers have to deal with the increased borrowing costs. Adjustable Rate Mortgages and interest rate buy downs are becoming popular again to help reduce the payments. Buyers and sellers should contact a mortgage advisor to discuss these topics and how it fits their financial plan.” 

From Dan:

Along with the increase in rates, there has been a a substantial increase in inventory. You are still in a great position to sell your home with the price increases over the last two years. If you have a property you have been considering selling, now is the time before inventory continues to rise! If you are thinking of buying, you have a lot more options to choose from and definitely have a bit more leverage. Be sure to text me at 843.532.4653 or email me dan@danlorentz.com with any questions you may have about the changing markets and rates.