Now is the time to take advantage of these low interest rates and purchase a home! According to Freddie Mac’s latest Primary Market Survey, interest rates for a 30-year fixed rate mortgage are currently around 4%, which is still very low in comparison to recent history.
The interest rate you secure when buying a home not only greatly impacts your monthly housing costs, but also impacts your purchasing power.
Purchasing power, simply put, is the amount of home you can afford to buy for the budget you will have available to spend. As rates increase, the price of the house you can afford will decrease if you plan to stay within a certain monthly housing budget. The chart below shows what impact rising interest rates would have if you planned to purchase a home within the national median price range, and planned to keep your principal and interest payments at or about $1,100 a month.
With each quarter of a percent increase in interest rate, the value of the home you can afford decreases by 2.5%, (in this example that amounts to $6,250). Experts predict that mortgage rates will continue to increase, and be closer to 5% by this time next year.
Act now to get the most house for your hard-earned money! Contact one of our preferred lenders to get your rate locked in, before we see the next increase!
I would love to talk more about any of your home buying needs. As a full-time Realtor, I understand market trends and can help you navigate through what is happening in areas where you are looking to buy! My goal is to help you find your dream home and find your Joy of Coming Home! Call me at 480-395-6080 or contact me here to get started today!