Mortgage rate are a big player in determining how much home you can purchase. I am asked by buyers often what I believe will happen with rates. While I am not an expert, I do know a few people who are.
Last week, at Keller Williams Mega Camp, Gary Keller and Jay Papasan talked about interest rates.
Mortgage rates remain historically low, and only recently jumped to above 4 percent. In January, the 30-year mortgage went up by 1 percent. “That’s a 10 percent increase in the monthly cost of the home,” said Papasan. Or a 10 percent drop in affordability. “Don’t panic,” Keller warned. “Let’s get some perspective: I got into real estate during the highest interest rates ever. We were asking people to agree to 14 points on their mortgage and people still bought. Every market has their pros and cons."
So, if you ask the question, "Is it a good time?" here is my answer:
If you are in a position where you will have steady income (what you make now for many years to come), don't see yourself moving for 5 years, have money saved that you would like to invest, don't mind the extra responsibility of being responsible for home repairs, and like the idea of being able to generate equity (wealth), then yes. Right now is a great time to buy. With interest rates where they are, you may actually be able to pay less for a mortgage than you would for rent.
If you are interested in finding out how much home you could afford, I would be happy to help you along the way! Contact me today!