If you've been trying to buy a home in the Harrisonburg area lately, you may have noticed something frustrating... it keeps getting harder. And for many buyers, it's two factors combining to make it a challenge.

Rising Rates Are Eating Into Your Budget

When interest rates move up -- even a little -- it can quickly start to impact how much home you can afford. A rate shift from 6.5% to 7.25% on a $350,000 loan adds roughly $150 per month to your payment. And when you're already stretching to make a purchase work, that can push a home out of reach fast.

What makes it especially tricky is that rates can change between the time you start looking (and get preapproved) and the time we write an offer. You might get preapproved at one payment level, and by the time you're under contract, the rates (and thus your payments) have shifted.

And Then There Are Escalation Clauses

Popular homes in our market -- priced right, in good condition, in popular locations or neighborhoods -- are often still drawing multiple offers. When that happens, buyers often use escalation clauses to stay competitive. It's a reasonable strategy... but when several buyers use them on the same house, prices can climb quickly. A home listed at $350,000 might end up selling at $375,000 or $385,000.

So you've got rising rates pushing your monthly payment up, and escalating prices pushing your purchase price (and loan amount) up. Both are making it more challenging to buy right now.

What Can You Do?

1. Check in with your lender regularly to make sure you are working with current numbers for rates and mortgage payments.

2. Evaluate your monthly budget to decide how much you are comfortable paying as a mortgage payment - independent of what you might be qualified to pay. 

3.  On competitive homes, go in with your strongest offer, but all while still staying within your comfort zone.