![]() Problem is…the mortgage interest rate is now at 8%.Ī $600,000 mortgage (the original price at $1,100,000 with $500,000 down) at 3.76% would have been approximately $2,782. Now the buyer feels it is time to buy, so off to the bank to fill out a mortgage application. The buyer has $500,000 as a down payment. This may also be the best time for quite a while for Buyers to purchase a new home.Ī buyer waits for the market “to crash.” He has targeted a home in the $1,100,000 range. Newsweek Finance Thursday, 02 March 2023 03:22 PM EST It is almost certain that the number of qualified buyers will be reduced, and prices will continue to decline.Īt any rate, as predicted in the previous article, Now May Be the Perfect Time To Consider Selling Your Home! What will the mortgage interest rates be at once the Fed accomplishes its goal of curing inflation? Will there be any buyers that qualify at that point? It almost seems to be less painful having inflation than the level of pain the cure will cause.Ĭurrently, the Fed Funds Rate is at 4.75%. Rates go up, company’s expenses go up, sales are down and employees are laid off, so there are fewer people able to purchase goods, and prices finally lower. It is possible that the Fed will lean towards more rate increases to try to curb inflation, to the extent of increasing unemployment. One of the issues is that approximately 40% of existing mortgages are pandemic period, low interest rate mortgages that are outside the control of the Fed. Now, it looks like the Fed needs to continue to increase interest rates. Some of the indicators appear to have not reflected the true nature of the economy. It appears that during January, stores were selling leftover Christmas stock at a huge discount. There seems to have been promising economic indication last month that they were making progress against inflation with existing rate increases. So what may we expect in the near future? Ouch! So, how does this translate into actual increase in a mortgage payment?Ī $500,000 mortgage over 30 years at 3.76% comes to approximately $2,318.00 per month.Ī $500,000 mortgage over 30 years at 6.65% comes to approximately $3,210.00 per month. ![]() “Meanwhile, mortgage buyer Freddie Mac reported Thursday that the average on the benchmark 30-year rate also rose, but to 6.65% from 6.5% last week. mortgage rate surged to 7.1%, reflecting higher Treasury yields and expectations that the Federal Reserve will continue to raise its benchmark rate and keep it there until inflation recedes, Mortgage News Daily reported Thursday ”. It is increasingly more difficult to qualify for a home mortgage. We are starting to see more price reductions and properties being on the market longer, with fewer showings, since there are fewer buyers. Interest rates are still on the rise, and the ability for buyers to afford to purchase a home is becoming more difficult. ![]() If you have not had the opportunity to see the previous article from last October, please visit Part 1 here. Buying Advice Inflation, Mortgage Rates, & Property Values… (Part 2) ![]()
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