Buying a house? Brace yourself for interest rate shocker
(KTEN) — Nationwide mortgage interest rates between 6 and 7 percent may be daunting for prospective home buyers, but higher mortgage rates mean lower upfront house prices.
"So the good news for the buyers is, they have to pay less for the house," said Guild Mortgage area manager Michelle Castle. "The bad news for the buyers is the interest rate is higher."
Interest rates did increase over the last two years, and inflation has also added to the sticker shock of buying a new home.
"If you were to take everything that's incrementally gone up during inflation and compare it to interest and compare that to actual rise in interest rates, our interest rates haven't risen as much as everything else," Castle said.
Savvy buyers can work with sellers to secure a lower price than listed due to a recent slowdown in the housing market.
"Sellers are willing to negotiate; sellers are willing to buy down people's interest rates," Castle said. "Six months ago, I mean, a seller wouldn't even negotiate. You just had to take the house as-is."
Potential homeowners also benefit from the area they're buying in — areas like Texoma.
"People were paying $80,000 to $100,000 over the asking price," said Realtor Tommi Sue Homuth. We didn't have that up here; they weren't paying that much more. They were in Frisco, McKinney, Dallas... those areas."
Castle and Homuth warn that those high interest rates will not be going down anytime soon, as the Federal Reserve continues to battle inflation.