Historical Mortgage Interest Rates
As reported by The Mortgage Market Guide in October: “There is no doubt that rates are going higher, and clients are simply foolish to not take advantage of the current environment, as it is highly unlikely that rates will ever be lower or even potentially equal to where prices have been over the past week.”
And then again in November they reported “…Future inflation is not a matter of “if”…it’s simply when and how high.”
Let’s look at what this means in terms of buying a home:
Say you want to purchase a home for $500K (an average home cost here in San Diego), the principal and interest at 5% on a 30-yr loan would be $2,684/mo. The same payments for a 6% loan would only allow you to purchase a home worth $447,687, a loss of $52,313 buying power!
Likewise with the same scenario, the cost to you from having a $500K home on a 5% note versus a 6% loan will cost you $112,910 over a 30-yr amortized loan.
So while our real estate market may be heading toward a slow recovery, the time to get the best value for your dollar doesn’t get any better than right now!
