Back in early May, and throughout most of 2013 and 2012, an interest rate of 3.5% was commonly available. For the conventional 30-year loan Buyer who borrowed $280,000 at 3.5% to buy a $350,000 home, the monthly payment was about $1260.
But with the recent June jump in rates to 4.5%, the monthly payment for the same loan is now $1420. That's a monthly increase of $160 and almost $2000 in extra payments annually. Take that out over the life of a loan and that's $60,000 out of pocket for the privilege of buying in early July instead of early May. That's the bad news...
Now for some good news for those buyers who snoozed but still aim to purchase a home in 2013. Summer and Fall are typically times of reduced demand, and it's not uncommon for home prices to dip 5-10% from their springtime peaks. Couple this late season discount with a likely short-term, backslide and correction to the recent spike in rates, and late-season buyers may not wind up with payments too much higher than the early birds of springtime. Most important to remember, while rates have risen dramatically (the last week of June had the greatest weekly percentage rise since 1987); historically, interest rates are still astounding low. You may not be grinning ear-to-ear now, but if your interest rate eventually begins with a 4 and not a 5, 6, 7 or 8, you'll but a happy homeowner for decades.
Contact R5Realty/Prudential today and Lets Get Moving, 610.348,7972.
