There’s a great article in the New York Times touching on this very topic. I have many clients waiting for home prices to further drop before finding their home match but the reduced home prices should be balanced with the rising interest rates. Unless you are paying cash you may pay in an interest rate what you’d be saving in a reduced home price AND all the while missing the time you could be spending in your new home! A great lender, Steve Nassar of Alpine Mortgage says:
- A 1% increase in the interest rate can add as much as 19 percent to the total cost of the home
- The Mortgage Bankers Association expects the rise to continue, with the 30-year mortgage rate going to 5.5% by late summer and as high as 6% by the end of the year.
- Some firms, like Morgan Stanley, are predicting that rates could rise by a percentage point and a half by the end of the year.
Ask the questions, use the calculators and make sure the window doesn’t close before you can climb through! -Kristie McDonald
Tags: interest rates, new york times, steve nassar