Inflation impacting payments for new homebuyers
WICHITA, Kan. (KWCH) -With mortgage rates now at more than 6%, if you’re in the market for a new home, you can expect higher monthly payments. In the last year, mortgage rates have doubled, meaning you’d pay about $400 more per month on a $200,000 home than you would have when the rate was closer to 3%.
Wichita State University Center of Real Estate Director Stan Longhoffer said the current mortgage rate is a reflection of where inflation will be in the future.
“Some of it has to do with what we call the real estate interest, which is what lenders have to be compensated for in terms of real goods and services to give up money from now and get paid back in the future,” Longhoffer explained.
Longhoffer said the housing market is still strong and values likely won’t fall.
“Starter homes are good homes. You can go and buy a house that’s a fixer-upper that needs some TLC, you can build some sweat equity, and then in five, six, seven years, you’ll be able to sell that,” he said. “It should retain its value Never say never, but I don’t see home prices dropping in the foreseeable future.”
If you’re in the market for a new home, Longhoffer advises not to wait for rates to drop because it’s difficult to predict when that could happen.
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