According to
Freddie Mac's latest
Primary Mortgage Market Survey,
interest rates for a 30-year fixed rate mortgage are currently at
3.47%. Rates have remained at or below 3.5% each of the last 16 weeks,
marking a historic low.
The interest rate you secure when buying a home not only greatly impacts
your monthly housing costs, but also impacts your purchasing power.
Purchasing power, simply put, is the amount of home you can afford buy
for the budget you have available to spend. As rates increase, the price
of the house you can afford will decrease if you plan to stay within a
certain monthly housing budget.
The chart below shows what impact rising interest rates would have if
you planned to purchase a home within the national median price range,
and planned to keep your principal and interest payments at or about
$1,100 a month.
With each quarter of a percent increase in interest rate, the value of
the home you can afford decreases by 2.5%, (in this example, $6,250).
Experts predict that mortgage rates will be closer to 4% by this time
next year.
Act now to get the most house for your hard earned money.
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