WHOA!!! Stop with the Rate Hikes Please!!
This is what the increase in interest rates means to the average home buyer.
In October of 2021, the mortgage rates were about 3%. Today, they are about 5.25%. On a $500,000.00 home, the difference in the monthly mortgage payment is…at 3% = $3,099.11 and at 5% = $3,740.28. PITI (principle, interest, taxes and insurance)
This is why we are seeing an increase in the inventory of homes for sale. At 3% interest rate, a buyer could purchase a home for $500,000 and have a $3,099.11 monthly payment and today, at %5.25, that same buyer can buy a home for $415,000.00 for a very similar payment of $3,104.43. This is if all other factors remain the same.
I’m not saying every home seller has to reduce their price, I’m saying that there will be fewer buyers in every price range… especially at the upper end.
Now, I know we have to get inflation under control, but who’s controlling the mortgage rates? The Federal Reserve Chairman has only increased the federal funds rate by .75%, yet mortgage rates went up over 2%! HMMM!!!! Something’s wrong!
FUN FACT: Back to The Old Farmer’s Almanac.
June was named for the Roman goddess, Juno, patroness of Marriage and well-being of women. Also, from the Latin word juvenis, ‘young people’.
Also, Summer officially begins on June 21st. Though, we all know, it’s already hit the high 90’s in temperature, so we really don’t a date to tell us summer is here 😊
If you have any questions about this or any other real estate related matter, feel free to call, text or email me, and I’ll be glad to address your questions. And Oh, by the way…. I’m never too busy for your referrals!
Sincerely
Ron Hier
