We often quote that there are only two constants in life; death and taxes. However, in the near future there will be two other major factors affecting your life, especially if you want to buy a home. Increasing housing prices and mortgage rates.
The Federal Reserve has kept interest rates artificially low for a few years now in an effort to stimulate the economy. A shifting in current policy is to go back to allowing the interest rates to go return to their natural level. This will probably result in higher mortgage rates. Currently, 30-year fixed mortgage rates have risen 1 percent over the January 2013 level.
With new housing starts up and activity in the foreclosure market down, home prices are beginning to inch back up in most markets. The National Association of Realtors recently published an infographic with stats talking about the rising housing market that states existing home sales are 1.2 percent lower than last year, prices are up 9.4 percent and inventory is also up 5 percent over a year ago.
With this information, why are you still sitting on the fence? A 2 percent rise in price plus a 1 percent rise in mortgage rate would make your monthly payment rise by $175.00 each month for your mortgage term. Think of what you could be doing with that extra $175 instead of paying it on a mortgage payment. You could buy some new furniture, reduce your mortgage principal, contribute to a retirement account, buy a car or save it for a future need. Take a look at the sample graphic below for more details on your cost.
Don’t wait…let me get you a list of Fairfax homes for sale today and get you in a home before the rates get too high.