Friday, April 25, 2014
Interest rates are on the rise which could make your buying power go down. With every 1% rate increase, the typical borrower loses 10.75% purchasing power.* That means if you could afford a $100,000 home at 4%, you could potentially lose $10,750 of buying power and now only qualify for a $89,250 house at 5%.
That is not good news to buyers or sellers today. Sellers, who have been optimistic recently because of increased demand and some appreciation in home values, are affected by rising interest rates because it limits buyers choices in which homes they can afford. Buyers are affected the same but feel the pain for a much longer time, say 30 years or until they can refinance at some point in the future.
Depending on who you listen to, rates will go up a little or a lot! But most agree, upward is the trend for the spring, 2014 season.
If you need to buy or sell a home, the best window of opportunity may be right now. Rates are still low enough to make home ownership more attractive than renting and springtime is the most active season for buying and selling.
Call me today and let's get started!
* themortgagereport.com 6/23/2013