Today, we'll talk about what you need to know regarding rising interest rates. Rates are projected to steadily rise through 2018. By December 2018, rates could be at 4.8%. According to the latest industry survey conducted by Freddie Mac, the average rate for a 30-year fixed home loan was hovering around 3.8% in October 2017.
While a one percent raise might not seem like much, it can significantly affect both buyers and sellers. For example, let's say you're looking to buy a $200,000 condo while rates are at 3.8%. If rates go up to 4.8%, you could only afford a $180,000 condo. A one percent rise in rates is equivalent to 10% of home value.
Basically, while rates are low, more people can afford to buy your home. Low interest rates make it easier for sellers to sell their homes, and buyers will get lower monthly payments. We advise that you take advantage of these low rates now, as rates will continue to rise for the next few years. They will eventually come back down, but probably not for a few years.
Mortgage Rate Forecasts for 2018
Predictions for 30-year mortgage rates (on average) from Mortgage Bankers Association:
Q4, 2017 — 4.2%
Q1, 2018 — 4.5%
Q2, 2018 — 4.7%
Q3, 2018 — 4.8%
Q4, 2018 — 4.9%
If you have any questions, please give us a call or send us an email. We'd be happy to help you!
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