According to The Washington Post, interest rates are on an upward climb reflecting lower unemployment rate figures. The latest figures, from Freddie Mac, have the interest rate at about 3.86% for a 30-year fixed mortgage, with a 0.6 point (fees paid to lender equal to 1% of loan amount). The rate was 3.75% just the previous week, and 4.37% one year ago. Along similar lines, for 15-year fixed rate mortgages, the average increased to 3.1% with a 0.6 point. The fixed 15-year rate mortgage was just 3.03% last week.
In addition, the D.C. area’s housing market has sales prices rising as well. Sales were 2,608 homes last month, a 0.7% increase from February 2014, and the most sales for a February for the past two years. Also, it was the third month in a row that sales rose year-over-year. Thus, the median home price in the D.C. region was $390,000 for February which is $15,000 higher than February of last year. Additional homes are coming onto the Spring market which should help to alleviate low inventory. There was an increase of 16.6% of inventory from a year ago with 8,175 listings last month. However, this amount of inventory is still low compared with the usual 12,900 homes that usually average for the month of February.
What does this mean for buyers? Well, it means buyers should think about purchasing sooner this year, rather than later if they would like to save more. With both interest rates and sales prices continuing to rise, this translates into increased total interest paid over time as well as a higher monthly mortgage payment. As an example, a listing The Girls have at 7340 Tucan Court in Warrenton (just a mere 50 minutes outside of D.C.), is a gorgeous 5,600 sq. ft. home for just $650,000. What would it mean if a buyer were to buy now versus waiting a few months when interest rates and prices could rise? What would their monthly payment look like? We checked in with Ric Segovia of George Mason Mortgage to see what the figures might look like if the price were to increase to $670,000 and the interest rate rises from 4% to 4.5% over the next few months:
Buying Today (30-year Fixed Rate Mortgage)
|Down Payment||20 %|
|Interest Rate||4 %|
|Principal & Interest||$2,482.56|
|Total Monthly Estimated Payment||$3,377.04|
Buying in May – Interest Rate & Price Increase (30-year Fixed Rate Mortgage)
|Down Payment||20 %|
|Interest Rate||4.5 %|
|Principal & Interest||$2,715.83|
|Total Monthly Estimated Payment||$3,614.48|
Just waiting to buy a $650,000 home that could increase by $20,000 in the next few months, means possibly spending upwards of nearly $240 extra each month on mortgage payments. That’s approximately an extra $86,400 in interest over the span of a 30-year fixed rate mortgage.
Click here to see the Virtual Tour and find out more information for 7340 Tucan Court: http://mrislistings.mris.com/DE.asp?ID=61916609430
Call The Girls of Real Estate today
before interest rates and sales prices continue to rise this Spring!
Candace Moe 540-270-0274
Heidi Jerakis 703-585-4098
Chelle Gassan 571-330-6164