Interest rates affect real estate immensely. Find out how here.
If you’re interested in real estate, it’s always vital to know about interest rates.** This April saw historically low interest rates at approximately 3.5%.** When I bought my first home about 40 years ago, I paid roughly an 11% interest rate.
Let’s say a house costs $430,000 with a 3.5% interest rate; your payment would be $1,931 per month, not including taxes or insurance. Last year, interest rates were right around 4.5%, a full percentage point higher than now. The payment for that same house with a 4.5% interest rate would be $2,179— $248 more per month than the lower interest rate, which is almost $3,000 more per year. Compared to a year ago, this gives buyers $50,000 more in buying power.
This is the power of interest rates. One of my mortgage partners has interest rates on some loans as low as 2.5% on a 30-year fixed! Interest rates fluctuate daily, but these days they’ve been great.
If you want to know more about interest rates or are considering buying or refinancing, let’s talk. Give me a call or send an email. I’d be glad to speak with you.