According to Freddie Mac’s latest Primary Mortgage Market Survey, interest rates for a 30-year fixed rate mortgage are currently at 3.92%, which is still near record lows in comparison to recent history!
We have researched to see what interest rates have done over the last 200 years and buying power is still very strong in today’s market even as interest rates are expected to rise over the next 12 months.
To get an even better look at the interest rates of today, this chart below tracks only the last 30 years.
Even with rising home prices, it is still a great time to purchase a home as we are expecting to see solid appreciation over the next few years.
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 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.
Keep in mind that if you are renting, your landlord has you paying HIS mortgage and he is including the upkeep on the home and the profit! It makes more sense than ever to buy now as the real estate market is expected to continue its rise in values.
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 between $1,850-$1,900 a month.
If you are considering selling a home, buying a home or investing in real estate anywhere in the country, contact me today to help you get the ball rolling.