Interest rates have risen this year. According to many experts, it will likely do so further during the year. This is important information for individuals who intend to purchase real estate this year. Interest rates rising this year and what Florida home buyers should keep in mind is provided in this article.
Importance of Interest Rates Rising This Year
The calculation of your recurring mortgage cost is a direct result of the interest rate. A change in interest rates will drop your approval price or make the monthly payment greater for the same home. Even an incremental increase can create a difference. If you are trying to purchase a house at the high end of your price range, a little rate increase may really impact you.
Here is an example of how max purchase price may move with interest rates. This is assuming a set down payment percentage and keeping the mortgage payment the same.
| Interest Rate | Price Limit |
|---|---|
| 4.00% | $449,773 |
| 4.25% | $436,494 |
| 4.50% | $423,791 |
| 4.75% | $411,636 |
| 5.00% | $400,000 |
| 5.25% | $388,858 |
| 5.50% | $378,184 |
| 5.75% | $367,955 |
| 6.00% | $358,149 |
Additional Factors to Consider
Other than interest rates, real estate values may also change. In many areas, home prices have risen steadily for at least a year now. Bidding wars and sales above list price are becoming occurring again. Much of this was created by low inventory and high demand.
What Florida Home Buyers Should Keep In Mind When Determining Whether to Buy Now or Wait
Upward interest rates and market values both have a negative effect on buyers. People will notice that their price point reduces over time. The condition of homes within a price range will lessen as well. Keeping this all in mind, there really is little benefit to procrastinating a property.
About This Spring
Spring is historically the busiest season for real estate. There should be more properties on the market to meet the built up demand, but competition will be strong as well. Individuals electing to purchase can benefit from still reasonably low interest rates. Forecasted improvements in home prices will bring a chance to grow equity in a shorter amount of time than normal.
Ideas On Helpful Home Enhancements