Money Monday...Concerned About Rising Interest Rates?
A few things to consider:
Rates are still historically low. The chart below from Freddie Mac shows the average 30 year interest rate was 6.04% as recently as November 20, 2008!
Rates have not averaged below 6% the past four decades! (please see Freddie Mac Chart from KCM below)
The amount of money borrowed, property taxes, and HOA typically have a much greater impact to monthly payment than a slight increase in mortgage interest.
Example:
$300,000 mortgage loan amount
30-year fixed mortgage
4.625% interest rate - $1,542 (monthly principal and interest payment)
5.000% interest rate - $1,610 (monthly principal and interest payment)
Payment Difference: only $68 a month
The purchase market is healthy! According to Tina Tamboer of the Cromford Report, prices are projected to continue to rise over the next 3 – 6 months.
The Cromford Report also notes that buyers typically have the most “buying power” in the 4th quarter of the year.
Positive economic news continues to make headlines, including:
The Job Market, Consumer Confidence and Economic Outlook:
- Job market: NBC News on the Economy
- Consumer Confidence: CNBC
- Economic Outlook: Washington Examiner
Freddie Mac Interest Rate Chart:
