Interest rates…you always hear about them. I don’t know about you, but worrying about my interest rate makes me more stressed on top of looking for the home of my dreams. Interest Rates are a necessary evil. I mean, why can’t they just lend us the money for free? Haha, I wish!
The rumor is that the Fed will be hiking interest rates up 3 times this year, which could mean your purchasing power will go way down. We don’t know if it will really happen, but the economy is getting stronger, which usually means rates go up. For example, I had a client purchase last year at a 3.5% interest rate. Now, we are projected at 4.5% for our new home that will close toward the end of the year. That doesn’t seem like much, but when I saw this graphic it really opened my eyes.
Prices and rates are most likely heading upward. Last year we could have purchased a $350,000 home vs. this year where we could purchase up to $310,296. In our hot Phoenix market, that is a big difference in home size and features. It could even be the difference in moving to your preferred area with the higher rated schools and getting that gorgeous backyard oasis you’ve been dreaming of.
This is definitely something to think about! Do you want to pay the same amount for a smaller home? I don’t!
JD aka #NewBuildNinja