With rising interest rates, how much will you pay for a $150,000 home this year?

2012 will go down in history as the year when interest rates were the lowest ever - 3.5%!!! And if you are still sitting on that fence waiting for the market to bottom out, well... it is time you jumped off.

 

Several things have been happening:

 

1. The number of homes on the market has dwindled. With demand exceeding supply, naturally home prices have gone up. (That's good news for sellers)

 

2. Mortgage interest rates have gone up substantially and in a very short period of time. 

 

How will this impact my buying power? I thought you'd never ask!

 

Let's say you were looking to buy a home for $150,000 and you had saved up enough money for a 20% down payment so that you did not have to have any PMI, then here's what you will be looking at:

 

Price of home: $150,000

Down payment: 20% or $30,000

Type of Mortgage: 30-year fixed

 

 

(Calculations from Realtor.com mortgage calculator)

 

So, in 2013, for the same priced home, you will pay $69.17 more per month! Or... you will have to buy a $133,000 home for the same monthly payment.

 

It has been predicted by experts that interest rates will dip down a little before they go up again and hit 5%!

 

Isn't it time you called me? I can always be reached on my cell phone at 803-348-9922 or email me at vsashikant@gmail.com.

 

Do check out all homes for sale in Columbia and Lexington at www.homesincolumbiasc.net

 

For... all Real Estate matters! 

 

Home Prices Up!

According to the National Association of Realtors, home prices are up in 88% of cities in the US.

Here are several explanations offered by different researchers and experts:

1.      An improved job market

2.      Interest rates are still low, though they have gone up too. Last week, one of my buyers was quoted a rate of 3.75% on a rural housing loan.

3.      A smaller inventory of homes in most metros – 21.6% fewer homes are on the market as compared to the previous year

4.      Rising rents

5.      Cheaper foreclosed and short sale homes have been steadily snapped up by investors reducing inventory

Cities with the biggest increases:

• Phoenix: 34 percent
• Detroit: 31 percent
• San Francisco: 28 percent
• Cape Coral, FL: 26 percent

Lawrence Yun, chief economist for the National Association of Realtors reported: “Home sales are on a sustained uptrend... they are being fueled by a pent-up demand and job creation, along with still-favorable affordability conditions and rents rising at faster rates.”

Sellers… are you reading this?