In recent weeks, Freddie Mac's average 30-year fixed mortgage rate increased to 5%. While this news may cause you to doubt the timing of your house hunt, the reality is that timing has never been more important. While you may be tempted to delay your plans in the expectation that rates would fall, doing so will simply cost you more money. Mortgage rates are expected to continue to rise in the coming year.

If you’re thinking of buying a home, here are a few things to keep in mind so you can succeed even as mortgage rates rise.

How Rising Mortgage Rates Impact You

Mortgage rates are an important factor to consider in your home search. As interest rates rise, so does the amount you'll pay in monthly mortgage payments, which directly affects how much you can comfortably afford. Here's an example of how even a quarter-point increase can make a significant difference in your monthly payment (see chart below):

You've probably already felt the impact of rising mortgage rates on your purchasing power. Instead of delaying your plans, today’s rates should motivate you to purchase now before rates increase more. Make use of that motivation to energize your search and plan your next steps accordingly.

The best way to prepare is to work with a trusted real estate advisor now. An agent can put you in touch with a reputable lender, assist you in tailoring your search to fit your budget, and ensure you're ready to act quickly when the time comes to make an offer.

Bottom Line

Rising rates should be viewed as a motivator to buy sooner rather than a reason to wait for serious buyers. In the long run, waiting will cost you more. Let's talk today so you can better understand your budget and be ready to buy a property before interest rates rise.