The Expert Podcast

• Interest rates on mortgages have gone over 8%, and while this may seem surprising after years of low rates, it’s been anticipated for a while. Rates may settle around 10%, and here’s what that means for homeowners, renters, and potential buyers.

• Federal Reserve Chairman Powell states inflation is still too high, and economic growth must slow to bring it down. To fight inflation, the Federal Reserve raises interest rates, leading to higher rates for housing.

• Lock in Your Rate Now: If you buy a home now at 8%, you're protected from further rate hikes. If rates eventually drop, you can refinance to a lower rate.
• Why Homeownership Is Still a Good Idea:
  • Homeownership ensures your monthly payments remain fixed. Renters, on the other hand, face unpredictable rent hikes.
  • Studies show renting can lead to more stress and faster aging compared to owning a home.
  • Owning a home is a long-term financial benefit: the value of your home could appreciate over time.

• Look for homes in the $200,000–$250,000 range. These may not be your dream home, but they’re an investment in your future.
• Consider low down payment programs (3%) to make the home more affordable.
• Buying a home with a mortgage locks in your payment and helps you build equity over time.

• Example: A $275,000 home could cost about $2,000 per month at 8% interest for a 30-year mortgage.
• Consider a 20-year or 15-year mortgage to pay off your home faster. With a 15-year mortgage, your monthly payment may be higher, but after 15 years, you own your home outright with no monthly payment.
• Buying a home guarantees long-term stability, unlike renting where rent increases are inevitable.

• If your rent increases by $200 each year, it can add up to $10,000 more in rent payments over the next few years. Buying a home locks in your mortgage payment and protects you from inflation.

• Buying a home, despite the higher rates, is a way to control your largest monthly expense. With savings, some work on improving credit, and time, homeownership can offer security and financial freedom in the long run.

• Don’t wait for rates to drop. Start planning now by saving and working towards a down payment. Homeownership can be your path to financial stability, even if it requires effort and sacrifices.