As we head into 2022, interest rates are expected to rise and local realtors and lenders say now is the prime time to buy your home.
The Federal Reserve is likely to raise interest rates significantly by March and inflation factors into the interest rate hike. The Fed doesn’t set the interest rate, but rate changes are brought about by their actions and policies, according to The Mortgage Reports website.
According to the Kinston Realty Group’s Josh Hardison, the seller’s market, which began about two years ago will continue with low inventory. He also said a potential buyer shouldn't hesitate.
“(They should) go ahead and get the process started because interest rates and mortgages are projected to go up,” Hardison said.
He said current interest rates are around 3.5%, up from 3.25% late last year for a 30-year mortgage, and a 15-year mortgage is 2.875%.
“It’s just about the best time for buyers because of low-interest rates. Most of the 2010s you were hovering around anywhere between 6 percent, and it got down to about 4.5, until about two and a half years ago,” he said.
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According to Hardison, interest rates have stayed low by the government to keep the economy functioning and avoid bottoming out like it did in 2008. The rates will increase as the Fed tapers off mortgage-backed securities – bonds that are secured for real estate and home loans.
Nathan Perry, owner of Nathan Perry Realty in Kinston agreed with Hardison’s assessment of now being the time to buy.
“Interest rates are going to go up, it’s just a matter of when,” Perry said.
Mortgage lock is also a good option, according to the realtors. Interest rates can change daily, so this means between offer and your closing, the interest rate will be “locked.” Typically, rate locks are for up to 60 days.
The average sale price of a home in Lenoir County as of last month was $175,329 up from $161,768 last December – an 8.38% increase, according to data provided by FlexMLS.
Greg Fader, mortgage loan officer of SMC Home Finance in Kinston said a buyer is definitely not going to get hurt purchasing a home now with the current interest rate.
However, he did say one problem is that people may be apprehensive about putting their home on the market without already having another house to move into, but praised Kinston realtors for their efforts.
“Kinston is doing phenomenal right now, and it’s due to our realtors. They have done a great job in keeping (as much) supply as they can, and moving property quickly. We are so fortunate to have the realtors in Lenoir County that we do,” Fader said.
He said the average loan amount in Kinston is $190,000, up from around $130,000 five years ago. He said this demographic doesn’t cover every buyer, however.
Fader also advises buyers to have a pre-approval letter when they go to a realtor. Often it can speed up closings and your finances will have already been assessed.
This article originally appeared on Kinston/Jones Free Press: Kinston real estate interest rates expected to increase