Although it is St. Patrick’s Day around the country, it does not stop the interest rates for home buyers from climbing. The rates for home buyers is still at record lows but this is changing fast and as you can see from the predictions now might be the best time to purchase a new home. Home inventory is low, but will increase over the spring and summer months so the best advice I can give you is to start your home search right away in order to save thousands throughout the term of your mortgage. I’m always here to help contact me anytime.
The 30-year fixed mortgage interest rate is currently still below 4%. Many buyers may be on the fence as to whether to act now and purchase a new home, or wait until next year, believing they still have time to lock in a low rate.
If you look at what the experts are predicting over the course of the next 12 months, it may make the decision for you.
Home Rate Predictions for 2016 2Q:
- 4.2% – Fannie Mae
- 4.7% – Freddie Mac
- 4.9% – Mortgage Bankers Association
- 5.3% – National Association of Realtors
Even an increase of half a percentage point can put a dent in your family’s net worth.
Let’s look at it this way…
The monthly payment (principal & interest only) on a $250,000 home today, with the current 3.86% interest rate would be $1,173.
If we take that same home a year later, the Home Price Expectation Survey projects that prices will rise about 4.4% making that home cost $11,000 more at $261,000.
If we take Freddie Mac’s rate projection of 4.7%, the monthly mortgage payment climbs to $1,354.
Some buyers might not think that an extra $181 a month is that bad. But over the course of 30-year mortgage you have spent an additional $65,160 by waiting a year.
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