How Interest Rates Impact Family Wealth

Hi Friends!

Interest rates are always in the news - and always the hot topic when it comes to entering the real estate market; at any price point.

So in my reading recently, I came across the article below that may offer some insight on how current & anticipated interest rates might impact you & your family's real estate decision making.

How Interest Rates Impact Family Wealth

"With interest rates still in the low 4%’s, many buyers may be on the fence as to whether to act now and purchase a new home, or wait until next year.
If you look at what the experts are predicting for 2015, it may make the decision for you.

Predictions for 2015 3Q:

• 4.6% - Fannie Mae

• 4.8% - Freddie Mac

• 5.2% - Mortgage Bankers Association

• 5.2% - National Association of Realtors

Even an increase of half a percentage point can put a dent in your family’s net worth.

Let’s look at it this way…

The monthly payment (principal & interest only) on a $250,000 home today, with the current 4.1% interest rate would be $1,208.
If we take that same home a year later, the Home Price Expectation Survey projects that prices will rise about 4% making that home cost $10,000 more at $260,000.
If we take Freddie Mac’s rate projection of 4.8%, the monthly mortgage payment climbs to $1,364.
Some buyers might not think that an extra $156 a month is that bad. But over the course of 30-year mortgage you have spent an additional $56,160 by waiting a year."

With these expected changes in interest rates - take the opportunity now to make the most of your real estate buying power!

And as always, please let me know if you have any questions!

~Amy
Source: KCM Blog