So today I was reading an article on the Wall Street Journal that basically was saying that the spring real estate market is going to be slow due to the increase in mortgage rates from 3.92% to an average 4.43%. In what they’re calling an average home that increase would be $55/month. Wow! (That was sarcasm…before you chastise me for that read on!)

I have to be honest and tell all new home buyers who are contemplating buying a home to not get caught up in the trap of wait-wait-wait! When I was 27 (a pretty typical age for a first time home buyer) I bought my first home at the going rate of 17% interest…you read that right!!! Mortgage interest rates in the early 1980’s were upwards of 17-18%. And yet, young first time home buyers like me bought a home. And so can you. Here’s how:

• Shop realistically. Your first home does not need to be your 4000 sf, two story, fully upgraded forever home in the ‘best status’ neighborhood in town. Figure out your budget, meet with a mortgage broker to see what you can qualify for and shop accordingly.
• Forget all the hype you see on tv real estate shows. If you don’t like the decor of a home that fits your style and budget, remember you can buy a can of paint for under $20 and create your own pallette. Have a painting party and provide friends with beer and pizza (under $100 for a good size crowd) and have at it! You’ll already be creating memories in your new home that will stay with you forever and cost very little.
• Buy a fixer upper in that better neighborhood and fix it up to be your perfect dream home! It’s not imperative to only look at move in ready homes especially  if they are out of your price point. If you want a neighborhood and the schools there then research, watch and find that great deal that comes up even if it’s going to take some elbow grease on your part to make it what you hoped it would be the day you moved in. Again, making a home your own has great value!
• If mortgage interest rates are going up then most likely so are interest rates on savings accounts, cds and other investment opportunities. Maybe spend less on eating out, going to movies, concerts, etc and put that money to work for you in savings or to put toward your monthly payment.  Believe me, once you own your home, you’ll look forward to relaxing there alone or with friends and family.
• Keep in mind that sellers might be reading that article too and thinking they need to lower their price to be inviting to the dwindling buyers (ok, yes, that was sarcasm too) and now you can get a great deal!

I’m not trying to imply that everyone can buy a home or that $55/month might change someone’s ability to buy a ‘particular’ home. BUT if you know yourself, your money and money habits and decide you want to buy a home, then understand that 4.43% is a pretty good rate compared to continuing to pay rent and pay off someone else’s mortgage. It really does fall back to how badly do you want home ownership and what are you willing to do to get it? If you figure that out without allowing outside ‘sky is falling’ media talk to make the decision for you, you’ll do just fine!