Where Are Interest Rates Heading?

How long will Interest Rates remain at these historic lows?

Interest ratesThe interest rate you pay on your home mortgage has a direct impact on your monthly payment; The higher the rate, the greater your payment will be. That is why it is important to look at where the experts believe rates are headed when deciding to buy now or wait until next year.

The 30-year fixed mortgage rate has fallen half a percentage point since the beginning of the year and has remained at or below 3.5% for the last 11 weeks according to Freddie Mac’s Primary Mortgage Market Survey.

The chart below shows how far rates have fallen this year (on the left), and uses an average of the projections from Freddie Mac, Fannie Mae, the Mortgage Bankers Association and National Association of Realtors (on the right). As you can see, interest rates are projected to increase steadily over the course of the next 12 months.

interest rates graph

How Will This Impact Your Mortgage Payment?

Depending on the amount of the loan that you secure, a half of a percent (.5%) increase in interest rate can increase your monthly mortgage payment significantly.

According to CoreLogic’s latest Home Price Index, national home prices have appreciated 6.0% over the last year and are predicted to be 5.4% higher next year.

If both the predictions of home prices and interest rate increases become a reality, families will wind up paying considerably more for their next home.

Bottom Line

Even a small increase in interest rate can impact your family’s wealth. Let’s get together to evaluate your ability to purchase your new retirement home.

 

 

 

About Christine Davis

Christine grew up in northeastern Pennsylvania in a small town called Pittston, which is located between Wilkes-Barre and Scranton. Upon graduation, she enlisted in the United States Air Force, where she proudly served for eight + years at a variety of bases throughout the world, including Holland, Korea, and New Mexico. While in the Air Force, Christine spent most of her time working in the civil engineering career field where she thoroughly enjoyed meeting and working with such a diverse group of people with varying backgrounds and experiences, and learned so much from each of them. Christine’s last assignment in the Air Force was at Andrews Air Force Base in Maryland, and that’s when she discovered the Delaware beaches. Growing up in PA, her family spent time at the Jersey shore. But once she moved to MD, she became one of those many drivers making the trek across the Chesapeake Bay Friday afternoon to visit the Delaware beaches for the weekend. Upon Christine’s separation from the Air Force, she spent a small amount of time working in Washington, D.C., but it didn’t take long before she was drawn to the quiet, slow pace of Lewes and Rehoboth Beach, “the nation’s summer capital”. Christine moved to Rehoboth Beach in 1999 and finished her degree in Business at Delaware Tech. At the time she was working for a large physician organization when a friend recommended that she become a REALTOR because she loved helping people and loved looking at homes. She was reluctant for quite a while because Christine didn’t think of herself as a salesperson. But after much urging by her friend, Christine decided to get her real estate license in 2003 and has not looked back since. Christine still doesn’t think of herself as a salesperson, but rather a facilitator between buyer and seller, working toward a common goal. Christine aims to make the process as smooth and fun as possible but also educates the buyer and seller along the way so they can make the best decision possible. Christine now lives in Lewes and although she misses the mountains of PA, she thoroughly enjoys spending as much time as possible at the beach, especially Cape Henlopen State Park. Christine’s philosophy in life is that it’s too short. Never spend so much time making a living that you forget how to live.

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