We have seen mortgage rates as low as 3.250% in Fall of 2016 to a high of 5.25% in October 2018. We have to readjust our purchasing power and how these rates can affect how much we can afford for a home. This means going to your lender and having your “Pre-Approval” updated to reflect the current mortgage rate of today. This will bring your purchase price down.
You can see with the increase in mortgage rates, it brings down the amount of Home you can afford. It equates to about $50,000 for each 1% movement in mortgage rates. This may vary depending upon the real estate taxes and homeowners insurance but gives you a good idea of waiting can cost you. Over the last several years, we have been spoiled with artificially low mortgage rates.
The Federal Reserve Chair Jerome Powell is new to the position as of February 2018 and is learning how sensitive a job this is. With the wrong choice of words, body language, overstuffed briefcase, it can and will affect the markets. In May of 2018 we reached new highs in the Bond Markets causing mortgage rates to rise even more. The Feds aggressive stance on raising rates has pushed the 30 Year Fixed rates up over 5.00% The fear of inflation and a volatile Stock market has mortgage rates rising everyday at the moment. Although these rate hikes do not directly affect mortgage rates, they will cause an increase in overall living expenses. This is the first time in 10 Years that the Federal Reserve has started to increase rates. Click here to learn more about mortgage rates
Economists have been warning us for the last few years, mortgage rates have to go up! The longer you wait, the more it will cost to buy a home. Or another way to look at this, you buying power could drop by 10% or more for each 1% increase in mortgage rate. Buy now while the mortgage rates are still low as we may not see these rates again in our lifetime!!
For more information on Mortgage Rates and Programs, feel free to call me at 978-273-3227 or email me .
Senior Loan Officer | NMLS #4194 | firstname.lastname@example.org