People are always asking me, “How’s real estate?” It doesn’t mean they’re getting ready to buy or sell a home. Many just want to know what impact the market is having on the value of their home or if it’s time to refinance or get a home equity line of credit.
Sometimes they have a friend or family member who is getting ready to buy or sell a home. If asked for advice, and people often ask for real estate advice, they want to be able to pass along information from real estate professionals who have current knowledge and past perspective.
If you want to know “how’s real estate?” you’ve come to a good place. I’ll be making regular posts about real estate news and trends. Your feedback will be important. Send me your questions and thoughts. We’ll do our best to keep it local, accurate, and interesting.
“How’s real estate?” is usually followed by “What are interest rates?” There has been little change since last week when the average for 30 year fixed rate mortgages hit a 10 week low of 3.65% (USA Today). Here are three examples that may help you understand what low rates can mean to you.
Example 1: A person is renting an apartment for $850 per month, plus utilities. To buy a home, this person could budget around $200 per month for taxes and insurance and have $650 per month left to pay the mortgage principal and interest. A $650 payment covers the principal and interest on a loan of $142,000.
Go to our #1 Search Tool and search for homes priced up to $142,000 to see how they compare to your apartment.
Example 2: A homeowner with a growing family gets a promotion and can afford a higher mortgage payment. Every extra $100 that a buyer can pay each month adds almost $22,000 to the home price the buyer can afford.
Check our mortgage calculator to find how much the payments are for different price ranges.
Example 3: If interest rates go up 0.5%, from 3.65% to 4.15%, the principal and interest payment on a $150,000 loan goes up $43 per month.
As you can see, rates are important. Right now they are really low and there are loans that require little or no down payment.
The average 30-year fixed rate mortgage fell this week from 3.72% to 3.65%, its lowest point in 10 months. (USA Today, 2-11-2016)
The general wisdom among economists last fall was that mortgage rates would gradually rise as we came to the end of 2015 and the trend would continue in early 2016. Locally, they did edge up a bit at the end of the year. Occasionally 30 year fixed rates hit 4.25%. Most days they were around 4-4.125%. Today, we saw rate sheets from local lenders quoting rates of 3.65%, which matches the national average. These are some of the lowest rates we have seen in years. With new homes coming on the market for the spring selling season and the surprisingly low rates, this may be an unusually good time to talk with a local loan officer. Getting pre-qualified is an important step in preparing to enter the home-buying market.
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