Now is a Great Time To Buy a Home and Here’s Why!
After several years of price drops, most of the nation has seen prices stabilize. Forecasts show we will begin to see modest gains in the housing market in the coming years.
More compelling is the current mortgage rates which continue to be at historic lows. Unfortunately, most mortgage professionals believe we will see a gradual rise in mortgage rates over the next several quarters.
The Mortgage Bankers Association (MBA) predicts that the mortgage rate will rise to an average of 4.4% by the end of the fourth quarter of 2013. “We expect that mortgage rates are likely to stay below 4 percent through the middle of 2013, and will increase gradually as the economy improves and finish around 4.4 percent in the fourth quarter of 2013.”
Below is a chart that illustrates what effect this will have on the average home buyer in New Castle County Delaware. As you can see, I have used the price range of $200,000 to $300,000.
You can see in most cases if mortgage rates increase as anticipated, you will lose about $25,000 in purchasing power. You can even see that your mortgage payment will be lower when you buy a home that is worth more.
Let’s look at your mortgage payment on a $250,000 home. At 3.5%, you will be making a mortgage payment of $1122.61. If you wait until the fourth quarter of this year, and the rate goes up as expected that same home would need a mortgage payment of $1266.71 or $144.10 a month.
I’m sure most of us would be delighted to save over $17oo a year. What would you do with that money?
Hopefully, you can see why you should seriously consider buying a home in Delaware now. Please feel free to call(302-733-7020) or email me (scasey@psre.com) if you have any questions about how mortgage rates will impact your home purchase.