Interest Rates Are on the Rise: Here’s How to Overcome Them

A family moving into their Wilkinson Home after buying down their interest rate.

July 15, 2022

Within the past few months, the ever-changing housing market has certainly created a frenzy across the country. With mortgage interest rates on the rise, and the demand for homes continuing to climb even higher, it’s no surprise that there is a common misconception that buying a new home right now is unattainable for most people. 

At Wilkinson Homes, our experienced team knows the industry inside and out. We understand how important the decision to purchase a new home is—and with the uncertainty that the market can sometimes bring, we want our homeowners to feel as comfortable as possible in order to make the best decision for them. Continue reading to find out more about the rising interest rates and how to overcome them when considering buying a new home.

Understand the rise of interest rates and demand

As of lately, interest rates in the housing market have been steadily increasing, and some potential homeowners are undoubtedly wary and hesitant of the idea of buying a new home now. However, rates are expected to continue to increase as we get farther into the year—so if you plan on waiting for rates to decrease, unfortunately, you could be waiting longer than you wanted.

Since the pandemic, the housing market has been highly competitive throughout the country as a number of individuals were either looking to move out of the crowded city areas and into a spacious home, or they were simply looking to move into a larger home in order to accommodate the new requirements we needed our homes to meet (such as having additional space for a home office). This skyrocketing demand led to increased and it doesn’t appear that this demand will slow down anytime soon. With that in mind, waiting for the market to drop back down might not be ideal if you’re hoping to move into a new home soon—but it’s important to know what you can afford and how to overcome these rising rates as a buyer. 

Know what you can afford

Buying a house—in any market—is likely the biggest investment you’ll ever make and a highly personal decision. Because homes represent the single largest purchase most people will make in their lifetime, it’s crucial to be in a solid financial standing before diving in. Use a mortgage calculator to find out how much you can afford to pay and to see what your monthly housing costs could be based on a particular down payment and interest rate.

The fact is—trying to time the market or predict what might happen next year is not the best homebuying strategy. Instead, it’s better to buy based on your budget and needs—which means if you find a home you love in an area you love that aligns with your budget, then chances are it might be right for you. However, if you make too many sacrifices just to get a house, you may end up with buyer’s remorse and an expensive payment for a house you settled for.

If you’re in the market for a new home or if you’ve found the home of your dreams, but are hesitant due to mortgage rates, there are a few ins and outs to help you overcome these higher rates and guide your decision in buying. This includes: 

  • Improve your credit. Often, the best way to secure the lowest mortgage rate is to ensure that you qualify for it, and a higher credit score plays a huge role in qualifying for your ideal loan. 
  • Work with a mortgage broker. You may be able to secure a more favorable interest rate if you work directly with a mortgage broker rather than a bank or lender.
  • Qualify for a different loan product. You may be able to get a lower interest rate—and make little to no down payment—by qualifying for the right loan type. Conforming, FHA, VA, and USDA loans can all offer great deals, but you need to find the loan product that best matches your profile.
  • Make a larger down payment. A larger down payment means you are a less risky borrower, which could mean a lower interest rate.
  • Consider an adjustable-rate mortgage. When fixed mortgage rates spike, some borrowers turn to adjustable-rate mortgages (ARMs). Many lenders offer ARM loans with initial teaser rates fixed for a set period—typically the first three, five, seven, or ten years of a 30-year loan.

These things can play a huge role in overcoming interest rates in today's market, but above all—it’s important to not settle and to not let the high numbers deter you from purchasing the home of your dreams. If you can afford the payment, it’s best to buy the perfect home for you and your family sooner rather than later.

Choose a trusted builder

With the pressures and uncertainties of buying a new home in today's market, it’s important to choose a trusted builder who is dedicated to exceeding the expectations of every single customer—and there’s no better builder to trust than Wilkinson Homes. Our team specializes in helping our clients find their ideal dream home that fits their wants and needs, and we don’t plan on slowing down our work anytime soon. The housing market is constantly changing, but the emotional and financial savings that come from purchasing and owning your own home will always be at the forefront of our industry, no matter what. 

At Wilkinson Homes, we’ve worked with countless homeowners throughout the great states of Delaware and Pennsylvania, and with over 3 decades of experience, you can trust that we’re giving you the best buying experience possible—even with the ever-changing market. If you’re ready to start the exciting journey to your forever home, be sure to browse through our quick move-in homes and our incredible communities throughout Delaware and Chester County, Pennsylvania—and for any questions or additional information about purchasing a new home, don’t hesitate to give us a call at (610) 274-8283 or contact us online at any time.

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