Nistler Home Building Blog
Now's the time to buy...
May 9, 2014
Sitting on the fence waiting for the right time to buy? You should consider now - before rising interest rates and home prices knock you off that fence. What you can afford in a home now is greatly affected by future increases in interest rates and home prices that decrease your purchasing power.
Your purchasing power ability is driven by the monthly mortgage payment you can afford. For example if you can afford a monthly payment of $1,000 for a $225,000 home mortgage now, but decided to wait a year, a 1% increase in interest means you’re your budget friendly $1,000 payment now gets you home mortgage of only $200,000. That’s a 10.75% decrease in the home price that you can afford. Analysts are predicting that the federal government may consider increasing interest rates in 2014.
Increasing Home prices also affect your purchasing power and in the Gallatin Valley they are being pushed upward by demand and tight inventory. While home prices do have an effect, experts like Dan Green of TheMortgageReport.com believe that “changing mortgage rates do more to influence home affordability than changing home prices.”
With interest rates and home prices rising, now is the time to consider purchasing a home. We suggest that you consult with a financial advisor or any online mortgage calculators like BankRate.com and MortgageCalculator.org can to determine what you can afford. In the meantime, we’ll continue doing what we do best - building and selling homes and condos - and we’ll be ready to say Welcome Home.
Information used in this Blog cited to TheMortgageReports.com Website.
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