Impact of Rising Rates When Buying A Home
While most area's of the county are still seeing home prices fall, that is not the case in the Northern Virginia area. In Prince William County we have seen prices rise as much as 30% since this time last year. With the shortage of inventory creating a sellers market there is a good chance that prices will continue to rise.
In a recent article from KCM Blog on the Impact of Rising Rates When Buying a Home there is a graph with what a home would cost you with a 4.5% interest rate verses 6%. In this scenario on a $360,000 home you could be paying $334.00 more per month.
None of us have a crystal ball but we do know that it appears that interest rates are on the way up. Per Freddie Mac, interest rates have gone up .5% in the last 4 weeks. "The 30 year fixed rate averaged 4.61 percent with an average 0.7 point for the week ending December 9, 2010, up from last week when it averaged 4.46 percent. Last year at this time, the 30-year FRM averaged 4.81 percent. This is as high as they have been in the last six months."
As KMC blog points out, "rising rates have a tremendous impact on a buyer’s payment. There are home buyers standing on the sidelines waiting for the prices of real estate to bottom out. If you are one of these buyers, be careful. You should be as concerned about the monthly COST as much as you are concerned about the PRICE"
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