After a few years of a fast paced real estate market, with record low interest rates and spiking home prices, the south Florida real estate market is finally beginning to regulate. Interest rates have drastically increased in the past few weeks, causing buyers to take a step back and re-evaluate what they can truly afford in the current market.

What Do Today’s Mortgage Rates Look Like?

A recent article by Keeping Current Matters breaks down the impact on your purchasing power based on current interest rates, considering a $400,000 home.

The article states, “Let’s assume you want to buy a $400,000 home (the median-priced home according to the National Association of Realtors is $389,500). If you’re trying to shop at that price point and keep your monthly payment about $2,500-2,600 or below, here’s how your purchasing power can change as mortgage rates climb (see chart below). The red shows payments above that threshold and the green indicates a payment within your target range.”

The chart above highlights the importance of working with an experienced real estate advisor, to gain a better understanding of how changing mortgage rates will affect your purchasing power with a particular budget in mind and help re-evaluate what you can truly afford.

Are Mortgage Rates Going to Decrease?

You may have decided, yet again, to put your home search on pause in lieu of the recent mortgage rate changes. But, there’s no telling which direction the interest rates will go as the Federal Reserve works to get inflation under control.

Choosing to wait this out may actually end up costing you more money, considering, “rents additionally rose at their highest pace in nearly four decades,” according to Nadia Evangelou, Senior Economist and Director of Forecasting at the National Association of Realtors (NAR).

Why is it Still a Good Time to Buy a Home?

While it’s true that home costs are high, the same truth applies to renting. The alternative with choosing to buy a home is that you are able to gain equity and increase your net worth over time, a benefit that does not come with renting.

If you’re interested exploring your options for financing, reach out to us and our team will connect you to local lenders, who are experts in the field and will work with your needs.

Whether you’re a first time home buyer or need a refresher on what the process looks like, explore our FREE online homebuyer course and reach out to our team with any questions.

Visit Navigating the South Florida Real Estate Market: What to Expect When Mortgage Rates Drop and Will Home Prices Drop in 2023? Our Predictions on Home Prices, Mortgage Rates, and More to know more.