If you are considering buying a home this year, chances are, you have been keeping up with mortgage rates. But in case you missed it, as your Houston real estate team, allow us to tell you that mortgage rates have decreased for three straight weeks now!
Last week, Freddie Mac shared that the 30-year fixed mortgage rate fell to 3.81 percent, the lowest it has been in three months. However, industry experts are still predicting that by this time next year, rates will have increased, possibly to nearly 5 percent!
This means that the sooner you buy a home, the more you’ll save monthly on your mortgage payments, and the more you’ll save over the period of many years.
To show just how much you would save, KCM Crew broke down costs. Although the rate right now is 3.8 percent, in their example, they used 4.1 percent as the current rate. In a year, they predict the mortgage rate of a 30-year mortgage to be 4.8 percent. They also predict that home prices will increase by 5.3 percent, as that is what CoreLogic projects. Let’s look at the difference in cost if you wait a year to buy.
If you were to buy a home that costs $250,000 now, with a 4.01 percent mortgage rate, you would pay $1,194.98 per month.
If you were to wait a year to buy that same home, it would cost $263,250 by then, and with a mortgage rate of 4.8 percent, you’d be paying $1,381.18 per month.
This means that by waiting a year, you would pay $186.20 more per month, which is $2,234.40 more per year, and a whopping $67,032 more over 30 years! Think what you could do with an extra $67,032 in your pocket!
As you can see, if the ability to buy a home now is in your favor, you should do it! If it’s not, you should start saving now for a down payment, or start paying down your debt in order to raise your credit score. If you’re not sure, make an appointment with a mortgage lender to see what your options are.
Have questions about buying a home in Houston, or about the local real estate market right now? Ready to buy? Contact us, your real estate team! That’s what we’re here for!