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7 Reason Why Higher Interest Rates Shouldn’t Deter You From Buying a Home

Published On October 9, 2023

In recent times, there’s been a lot of chatter about rising interest rates and their potential impact on the housing market. While it’s natural to be cautious, it’s essential to understand the broader picture. At Cove Realty, we believe that now is still an excellent time to invest in a home, especially for first-time buyers. Here’s why.

Interest Rates

1. Historical Perspective

First and foremost, it’s crucial to remember that even with the recent hikes, interest rates are still relatively low from a historical standpoint. There were times in the past when rates were double or even triple what they are now. So, while they might be higher than the record lows we’ve seen in recent years, they’re still quite reasonable.


2. Building Equity

Renting might seem like the safer option in a higher interest rate environment, but every rent payment is money you’ll never see again. When you buy a home, every payment you make, even with a higher interest rate, helps you build equity. Over time, this equity can be a significant financial asset.

Fixed Rate

3. The Power of Fixed-Rate Mortgages

If you’re concerned about rising interest rates, consider a fixed-rate mortgage. With this type of loan, your interest rate will remain the same for the life of the mortgage. This means your monthly payments won’t increase, even if market rates do.


4. Real Estate as a Long-Term Investment

Real estate has historically proven to be a solid long-term investment. Even if you pay a bit more in interest now, the potential appreciation of your property over time can far outweigh those costs.

First Time

5. First-Time Buyer Advantages

For first-time homebuyers, there are numerous programs and incentives available that can help offset higher interest rates. From tax breaks to down payment assistance, there are many resources designed to help newcomers enter the market.


6. The Cost of Waiting

While it might be tempting to wait for rates to drop, there’s no guarantee that they will. Moreover, as you wait, property values might continue to rise, meaning you’ll end up paying more for the same house in the future. The cost of waiting can be much higher than the cost of a slightly higher interest rate.


7. A Home is More Than an Investment

Lastly, it’s essential to remember that a home is more than just an investment. It’s a place to live, grow, and create memories. The emotional and psychological benefits of homeownership are priceless and shouldn’t be overshadowed by interest rate fears.

While it’s always wise to be informed and cautious, don’t let the fear of higher interest rates keep you from realizing your dream of homeownership. The team at Cove Realty is here to guide you through every step of your real estate purchase in Wisconsin or Illinois, ensuring you make the best decision for your future. Reach out to us today, and let’s embark on this journey together.

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