Hot Property: Why It’s Still a Good Time to Buy a Home
Interest rates, and inflation, are on the rise, but don't let that scare you out of the market.
After a chaotic start to 2022 that saw a huge spike in prices, things have changed a lot in the housing market since July.
With interest rates at 5.5% on a 30-year loan and inflation on the rise, buyers are taking a hard look at what they can afford, while sellers are evaluating the asking price on their properties.
Buyers had been looking at a $843 monthly payment toward principal and interest for every $200,000 borrowed at 3%; that amount now is $1,261 on a 5.5% loan — a difference of $418 each month.
The extra amount, along with the rising price of everyday goods, has taken many buyers out of the market. For those who remain, their buying power has shrunk.
This may also be a good time to remind buyers that the rate on a 30-year loan was 5.5% as recently as 2018. And since the market has cooled, this is still a good time to buy; you can always refinance your home if the rates drop again.
Hot Property offers an inside look into unique and historic homes on the market. Each week, Hot Property goes behind the For Sale sign to share the story of a special Pittsburgh-area home. Four times a year, Hot Property gives an in-depth look at the region’s real estate market in Pittsburgh Magazine HOME, tracking housing prices and sales and detailing where the hot properties can be found. Rosa Colucci can be reached at firstname.lastname@example.org