Higher rates no reason to panic
Yes, mortgage interest rates on 30-year fixed-rate mortgages have risen to an average of 5.25 percent. You’d think the world was ending.
No one wants to see mortgage rates rise. Low rates, historically low in mid- to late-2009, were one of the few positives associated with the residential real estate crash. Remember when the rates fell below 5 percent? That was a time for celebration. After all., low mortgage interest rates mean lower monthly mortgage payments.
But that interest rate of 5.25 percent on 30-year fixed-rate mortgages isn’t bad, either. Historically, in fact, it’s downright outstanding.
If you remember the housing boom years — they ended, unfortunately, in mid-2006, right after I bought my home — you’ll remember that rates in the 7 percent range were considered good ones for 30-year fixed-rate loans. That’s right, we all thought rates of 7 percent were as good as it could get.
Now we’re nervous about 5.25 percent? I’d say that those low, low interest rates of 2009 got us all a bit spoiled.
If you’re looking to buy a new home, don’t hesitate just because the interest rates rose. Housing prices are still low — check the stats kept by the National Association of Realtors and you’ll see just how low — meaning that you can buy more house with your money than in years. These ultra low prices make up for the slight increase in mortgage interest rates. In fact, this might be the best time to buy a house in decades.
It’s a Buy Now-er’s Market
Mortgage company Freddie Mac announced a rise in the standard 30 year fixed mortgage rate. The average rate rose from 4.82% to 4.91% in a week’s time.
Real estate agents and agencies continually sell the fact that it is a buyer’s market. It is a buyer’s market, that is, for those who will buy now. Like the car commercial says, “You may never have this kind of buying power again!”
And you probably won’t anytime soon. If you are thinking that you can wait around for the best rate and will catch the “big deal” you are only hurting yourself. If you are going to buy, buy now. Rates are only rising. A nine-hundredth percent raise may not seem like much, but if you do the math, .09% of 10,000 is 900. Now, every $10,000 you finance has an additional $900 to it. Those dollars add up fast.
If you are looking to buy a home, now is the time to buy. Focus on your important factors and get ready to finance. Rates will only continue to rise.
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