Buy Now Save Later
With interest rates down from last month and house prices continuing to increase, now is the time to take advantage of the low interest rates to find your home.
Where Are Interest Rates and Home Prices Going?
In December, the Federal Reserve increased their rates and mortgage rates have been steadily decreasing since then. With the economy improving at a pace below the expectation of economists, the poor start of the stock market and gas prices being low, interest rates have fallen lower as a result. This is due to a move to bonds for a safe haven for investment dollars the benefit is lower residential interest rates for home buyers.
Currently home values have been up, which is great for homeowners and sellers, but not so good for future homebuyers. With home values, it’s all about supply and demand, when inventory is low, home values tend to rise.
Interest rates have been at historic lows the past few years. In the next 6-8 months, interest rates may fluctuate and go up a little bit depending how the economy is doing.
Potential Cost of Waiting
Here are a few examples of how even a ½ point change in interest rates can impact the loan amount you can afford:
A .5% or ½ point in interest rates increasing results in the following:
On a $400k loan, a ½ point increase in interest rates would increase your mortgage payment by $117 a month!
More importantly on a $400k mortgage with a ½ interest rate increase, you would need to reduce your loan amount by $24k in order to maintain you mortgage payment. That is $24k less money you have to spend on your dream home!
This means that a home in today’s market could soon be out of reach if for some buyers if interest rates go up.
The same goes for home values increasing; as long as inventory stays low, home values will continue to rise. Soon buying a home in a desired area, school district and price point may become less reasonable to the average home buyer.
Your Time is Now!
If you’re planning on purchasing a home this year, now is the time to act! With interest rates low and house prices on the rise, now is a great time to secure a low interest rate. Get into a home with a good deal while you have it!
What’s Your Next Move?
The number one item we can encourage any home buyer whether it’s a first home or new home is to contact your mortgage advisor and become pre-approved. This process allows for ample time to make changes, corrections, simply answer questions and paves the way for an enjoyable financing experience.
Also check out Absolute Issaquah’s brand new Jumbo Core Program and see what benefits you can get on those larger loan amounts!