For Americans across the country, finances are one of the most complicated and head-scratching areas of their lives. The fact that our financial situations are so important can lead to a lot of stress.
A key financial detail that contributes to much of this stress is interest rates and how high they’ve recently become. As one of the more important 2023 trends to be aware of, rising interest rates must be addressed despite how confusing they can be.
The real estate experts at SRC Land are able to help people understand what higher interest rates mean for homebuyers in the current market.
How High Are Current Interest Rates?
You’ve likely felt the effects of inflation over the past few years, and The Federal Reserve has noticed. In order to fight inflation, The Fed lifted interest rates in 2022 at a scale that had not been seen since the 1980s.
Currently, the interest rate fluctuates between 4.5% to 4.75%, so, while current rate hikes in 2023 aren’t as sharp as last year, the effects of higher rates are certainly still being felt by consumers.
How Fed Rate Hikes Affect Mortgage Interest Rates
As of February 2023, the current mortgage interest rate is 6.77%, which is down from the 7% seen in November of last year.
If you compare this to the rate hikes introduced by The Fed, you can see that interest rates have a clear effect on mortgage interest rates. Though they aren’t quite as high as they were at the end of 2022, homebuyers should still be aware of how these rates are connected.
What High Mortgage Interest Rates Mean for Homebuyers
So what do high mortgage rates really mean for homebuyers? It comes down to three general outcomes:
- Higher Mortgage Payments – Even a small increase in mortgage interest rates can result in higher monthly payments.
- Tougher Market for Buyers – It will be more difficult for people to secure home loans, and some newer homebuyers may be completely driven out of the market.
- Borrowers Ultimately Pay More – Compared to a year like 2021, where interest rates were lower, borrowers in 2022 and 2023 will have to pay greater interest fees overall.
If securing a traditional mortgage may seem like a challenge for you, SRC Land has resources for those who are interested in buying land.
Seller Financing Can Help Secure Your Dream Home
With a tough market and higher payments, some may feel like the idea of home ownership is out of their control. That’s where owner or seller financing comes in!
Too often, people are turned away from the opportunity to purchase their dream home due to things like bad credit. An individual’s bad credit history may cause the bank to reject their request, but owner financing helps and removes the “middle man.”
SRC Land’s owner financing options allow for more control, more personalized terms, and the ability to disregard some of the effects of higher interest rates. You can get all the advantages of seller financing when you work with SRC Land.
SRC Land Has Homes for Sale and Options for Homebuyers
With fantastic seller financing options as well as unmatched customer service, SRC Land is in a unique position to answer whatever questions you may have in regard to real estate and help put you in your dream home.
If you want to buy or look at homes for sale, then reach out to SRC Land for assistance today!