If you’re house hunting right now, or toying with the idea of buying, toy no longer! The housing market has enjoyed remarkably low rates for quite some time, and now things are changing. An improving job market and subsequent actions by the federal government have driven interest rates up. Only a couple of months ago, rates were in the low- to mid-3% range, and they have risen substantially since then. For a short time they jumped up to about 5%, and are currently in the upper 4% range.
For those of you who aren’t very familiar with how interest rates affect your buying power, read on. Assuming you’ll be getting a loan for the house you want to buy, the higher interest rates are, the higher your monthly payment will be, and the less house you can afford.
For example, if you qualify for a monthly payment of $1518.00 and you get an interest rate of 4.5%, you could buy a home priced at about $332,833. If interest rates go up to just 5.5% again, for the same monthly payment you’d only be able to afford a home that’s $297,014. And with a 6.5% rate, you’ll qualify for a $266,809 home. That’s a big difference that will affect the type, size and location of the homes you can buy.
Interest rates are still good, but won’t stay low forever. And you can see what will happen if you don’t act soon and rates continue to rise: you will have to settle for less. And we don’t want that! We want you to get your dream home for whatever stage you’re in. So check out Ivory’s homes today before rates spike up again!
