It's really not hype! This is a good time to buy a home before the rates eventually rise. Let's talk about your purchasing power too!
Low Interest Rate = More Purchasing Power
Interest rates for a 30-year fixed rate mortgage are currently around 3.5%. Rates have remained at or below 3.5% each of the last 8 weeks.
The interest rate you secure when buying a home not only greatly impacts your monthly housing costs, but also impacts your purchasing power.
Purchasing power, simply put, is the amount of home you can afford to buy for the budget you have available to spend. As rates increase, the price of the house you can afford will decrease if you plan to stay within a certain monthly housing budget.
The chart below shows what impact rising interest rates would have if you planned to purchase a home within the national median price range, and planned to keep your principal and interest payments at or about $1,200 a month.
With each quarter of a percent increase in interest rate, the price of the home you can afford decreases by 2.5%, (in this example, $6,250). Experts predict that mortgage rates will eventually go up again in 2020.
Act now to get the most house for your hard earned money.