Metro Detroit

MORTGAGE RATES: UNDER 4% THROUGH 2013?

March 29, 2013
NHE

In an interview on CNBC’s Squawk Box last week, President and CEO of the Mortgage Bankers Association David Stevens advised that the U.S. housing market would remain strong if mortgage rates jumped up to 4% by the end of the year, as has been suggested.  Until then, the rates should remain at historically low levels.  As of Wednesday, 30 year mortgage rates averaged around 3.5% to 3.7%.  Even if rates did jump up, let’s put it in perspective.  Around the height of the market in 2005, mortgage rates were 7%.  At the time, anyone who complained 7% was too high received a gentle reminder that mortgage rates were around 18% in the early 1980s.  To be concerned that rates could go above 4% is generally uncharted territory; it’s been more than 100 years since rates have been below even 5%.

For those wondering how the lower rates affect your monthly payment, consider a $200,000 home.  Cutting your interest rate from 7% to 3.5% on a 30 year mortgage slashes your monthly payment by over $400 per month.  However, under current market conditions you’re not only saving on the mortgage rate, but on the actual price of the home as well.

While a low resale inventory is driving demand and inching house prices back up, the median sales price in metro Detroit remains 35%-40% below its 2005 peak.  Meaning, a house that would’ve sold for around $200,000 eight years ago, only costs about $128,000 now.  In short, far less money buys you considerably more house.

Beyond 2013, most analysts seem to think mortgage rates and home prices will go up.  If you’re thinking about a new home, call us.  Let’s explore your options today and see if we can help you take advantage of extraordinary market conditions, while rates and prices remain low.  If you’re looking to build, starting the process within the next few months can have your new home ready before the end of the year…

More Articles

NHE
Metro Detroit
VIDEO: ZILLOW DUMPS iBUYING

A couple weeks ago, Zillow® announced it was ending Zillow Offers, their iBuying platform; in the video below, Jeff discusses...

November 26, 2021
Read More
NHE
Metro Detroit
NEWSLETTER: NOVEMBER 2021

NEW HOME EXPERTS® SARASOTA NEW MARKET, NEW WEBSITE... SAME OLD EXPERTING If the assumption is that we are projecting our...

November 16, 2021
Read More
NHE
Metro Detroit
NEWSLETTER: OCTOBER 2021

HOW WE DO AND OTHER THINGS THE KIDS ARE SAYING It’s come to our attention that some of you just...

October 15, 2021
Read More

Get Expert help finding your new home

Contact An Expert Today

Sign up to receive updates on the latest news