Even though it seems mortgage rates keep raising and lowering recently within a tight window, the fact is they're still quite a bit lower than they were a few years ago, which means more buying power for consumers. If you're looking to buy a home this next year, this could be good news for you!
How Much More Buying Power?
Well, for example, back in 2000, when rates were around 8%, a family making around $60,000 a year could have afforded a loan for about $245,000. With rates currently at 4%, this same family can now afford a home loan of about $377,000.
However, this also means for every 1 percent drop in interest rates in the last 15 years, sellers can raise their price 12 percent. The other side of this though is that in some places, prices are rising big time due to short supply. Then, when affordability goes down, inventory goes up due to homes not being sold.
[Read More: First Time Home Buying Basics]
With interest rates so affordable, buyer traffic is indeed going up but many markets still have low supply. Construction teams and developers are scrambling to keep up with demand, especially in popular California markets.
Many are talking about how low the inventory is with agents seeing the limited selection impacting transactions. Prices are going up as we keep seeing fierce competition over quality listings. However, many are also talking about buyer resistance with the rise of prices.
[Related: Should I Buy or Rent After Retiring]
Are you looking to buy a home or at least start the process of thinking about what it would take to get a loan and start down that road to home ownership? If you answered yes, then now may be a great time to Contact me today! I'd love to help you find a home within your budget and one that fits your needs and desires. I work all over the Palm Desert and Palm Springs area and my website has the latest listings out just today! Start here at BuyHomesinPalmDesert.com or contact me directly for expert, personal care.
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