Realtor guides first-time home buyers amid higher interest rates

Published: Aug. 10, 2022 at 7:33 PM CDT|Updated: Aug. 10, 2022 at 10:14 PM CDT
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MONTGOMERY, Ala. (WSFA) - Months ago, it felt nearly impossible for some first-time homebuyers to even find a house. The competition was stiff.

We probably looked at, I’d say upwards of almost 30 houses,” said first-time buyer Jake Simonetti. “You would get excited, and then, you know, you’d get beat by somebody who’s offering 20-grand over in cash.”

While the market is still brisk, it is also changing. Now, the Montgomery Area Association of Realtors reports more homes on the market. A new hurdle is higher interest rates, especially for first-time buyers.

The Federal Reserve upped interest rates by 0.75% last month in an attempt to get a handle on inflation.

Realtor Bo Evans said interest rates hover at around 5.5%. Over his 31 years in real estate, Evans said that is not incredibly high – but it will certainly affect some buyers.

“There are people, obviously that could afford three months ago that probably can’t that need to put off for a little while and see what happens,” he said. “Maybe save a little bit more money for down payment.”

Evans recommends first-time buyers save up and show some a little patience.

“To see if the rates kind of come back down a little bit,” he shared. “A lot of people are expecting that this time next year.”

He explained buyers should also work on their credit score.

Another tip is to look at the cost you are willing to spend to rent a property. Then, search for homes that have a similar mortgage payment.

While it can be a little tricky for first time buyers, it is all about making strategic decisions that you can afford.

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