Interest Rates are on the Rise

By
Real Estate Agent with Keller Williams Greater Omaha 20041001

Interest Rates are on the Rise

Interest rates, while still near historic lows, are rising and buyers should be concerned. Interest rates are one of the major factors affecting how much home buyers can afford. 

First look at the graph below to see how much interest rates increased in 2013.

2013 Interest Rates

As you can see, last year interest rates rose by about one percent. What should we expect interest rates to do this year?

Projected Interest Rates for 2014

Experts expect about another one percent increase in 2014. Now most importantly how does this affect home buyers and their purchasing power?

How mortgage rates affect monthly payment

The graph above shows that with a one percent increase from 4.5% to 5.5% in order to keep the monthly mortgage payment the same, a buyer would need to reduce the price of the home purchased by 10%. This holds true regardless of price; a one percent increase in mortgage rates reduces purchasing power by 10%. 

Conclusion, if you are planning to buy a home buy it sooner rather than later. You will be able to afford a higher priced home or purchase the same home with a lower mortgage payment than if you wait. 

To get the best financing on your home purchase, contact us. We guarantee that no lender will be able to provide better terms than our lender. If we are wrong, we will pay your closing costs. 

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Topic:
Home Buying
Location:
Nebraska Douglas County Omaha
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Omaha Real Estate
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Rainmaker
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Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

I know that is where we are headed.  I wish you business much success.

Feb 19, 2014 11:56 PM #1
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Rainmaker
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The Trumm Team Omaha Homes for Sale, Real Estate

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