Interest Rates – Where are They Headed?
Your mortgage interest rate impacts your monthly payment. The higher your rate, the higher your payment. This is why it is important to look at expert market opinions when deciding to buy now or wait.
The 30-year fixed mortgage rate has fallen half a percentage point since the beginning of 2016. It has remained at or below 3.5% for the last 11 weeks according to Freddie Mac’s Primary Mortgage Market Survey.
The chart below illustrates how rates have fallen this year (in blue), and uses an average of the projection of where rates are headed from Freddie Mac, Fannie Mae, the Mortgage Bankers Association and National Association of Realtors (in orange). As you can see, interest rates are projected to rise over the next 12 months.
Depending on the amount of your loan, a half of a percent (.5%) increase in interest rate can increase your monthly mortgage payment substantially.
According to CoreLogic’s latest Home Price Index, national home prices have appreciated 6.0% over the last year and are predicted to rise another 5.4% higher next year.
If home prices and interest rate both rise, you will pay considerably more for your next home.
Real Estate Bottom Line
Even a small increase in interest rate can impact your family’s financial plan. Let’s get together to evaluate your ability to purchase your next home.