Mortgage rates have been making the news recently, due to the fact that interest rates have been on the rise again. As your Central Coast real estate agent, allow me to explain how mortgage rates affect Lake Nacimiento homebuyers, and when you should consider buying.
If you’d like to buy a Lake Nacimiento home soon, you should keep your eye on mortgage rates. They have been on the rise as of late, which not only affects your monthly housing costs, but also your purchasing power. Your purchasing power is the amount of home you can afford to buy based on the budget you have available to spend.
As mortgage rates increase, this decreases your purchasing power and increases your monthly housing costs. For example, if you wanted to keep your monthly mortgage below $2,050, you could buy a $400,000 home with a 4.50 interest rate and spend $2,026 per month, but with an interest rate of 5.50, you could only purchase a $360,000 home to keep your monthly spending at $2,044. Check out this graph for more details.
While mortgage rates are on the rise, there is still some good news:
1. Mortgage rates are still far below levels of past decades. In the 2000s, they averaged 6.29 percent. In the 1990s, they averaged 8.12 percent. In the 1980s, they averaged 12.7 percent. Right now, they are averaging around 4.75 percent. You can still take advantage of lower rates than your parents or grandparents experienced.
2. Home price increases are slowing down. Home prices are still on the rise, but the rate at which they are increasing has slowed down.
3. Mortgage borrowers are getting approved for loans with lower credit and higher debt-to-income ratios. If you think you won’t qualify for a mortgage, it’s worth meeting with a lender to find out. You might be surprised!
If you’d like to buy a Lake Nacimiento or Central Coast home, now is the time to do it! The sooner you buy, the more you could save, before mortgage rates and home prices increase any further. The days of historically low mortgage rates may be over for now, but rates are still much lower than in past decades.
Plus, by purchasing a home this fall, you could reap tax benefits when filing this year’s taxes, and you could be settled into your new home by the time the holidays arrive! With more pleasant temperatures this fall, now is a great time to buy.
If you have questions about the Central Coast real estate market, don’t hesitate to contact me! If you are looking for a local mortgage lender, I can offer recommendations. If you are ready to begin house hunting for your Lake Nacimiento dream home, give me a call! As your Lake Nacimiento real estate agent, I am here and ready to help you with all of your real estate goals this fall season on the Central Coast.
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Oak Shores Realty specializes in Oak Shores at Lake Nacimiento properties. Please contact us today to get more information on Lake Nacimiento lake homes. Oak Shores Realty can also provide you an insiders “Lake Nacimiento Buying Guide” with great information including maps and market information.