Interest Rates Could Rise Again in October
Interest Rates Could Rise Again in October
Buyers ask me whether they should move now or wait. I understand why. When you’re making a decision this big, even a small change in the monthly payment matters.
But I think there’s a better question to ask before choosing a price range:
What payment would still feel comfortable if rates changed before you found your home?
I always suggest testing rates half a percentage point above today’s rate if you plan to buy in three months, 0.75 points if you’re six months out, and one point if you’re a year out.
For a buyer with a $2,000 monthly principal-and-interest budget, that three-month range changes borrowing capacity by about $30,000. Across the one-year range, the difference is more than $60,000.
That’s why, when I help someone plan a purchase, I want to show more than one rate and one payment. We look at taxes, insurance, HOA dues, and mortgage insurance where applicable. Then we talk about what the buyer is comfortable paying, not just what they may qualify to borrow.
I don’t know exactly where rates will be when you find your home.
But we can prepare for more than one outcome. And that gives you a much better place to start.
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