History Offers Perspective on Interest Rates

Spring has Sprung!

By Brian Hunton

Now that Spring is here,

everyone is buzzing about the real estate market. The media loves to sensationalize things, and the real estate market is no exception. If you listen to the headlines these days, it’s easy to get spooked out of the housing market.

While it’s true that there are currently fewer homes on the market than there were last year, it’s not as dire as the headlines make it sound. As for prices, they are indeed rising, but at a slower rate than they were last year. And while interest rates are on the rise, they’re still near historic lows. The current market conditions may be challenging, but they’re far from impossible. Let’s unpack the headlines and break down the real truth about the current state of the real estate market.

And, as always, if you have any questions or just want to talk more about our local real estate market, I am just a phone call or text away.

History Offers Perspective on Interest Rates

Understanding the history of interest rates can help provide perspective on current rates. For example, in the early 1980s, the national average for a 30-year fixed mortgage was just over 16%. In contrast, today’s average rate is less than 4%.

While it’s true that interest rates are cyclical and will eventually rise again, they are still relatively low by historical standards. This low-rate environment allows borrowers to lock in relatively low monthly payments. It’s also worth noting that even a 1% increase in interest rates would still leave today’s rates well below the historical average. For these reasons, now is a good time to consider refinancing or purchasing a home.

Paying a higher price for a home and a higher mortgage rate can be difficult to swallow. However, waiting will just cost you more. If you’re ready, willing, and able to buy a home, now will be a better time than a year or even six months from now. Get in touch with me today, and let’s plan to take advantage of today’s rates before anything changes.

Homeowners’ Net Worth Gets a Big Boost

Have you checked your Net Worth?

If you’re a current homeowner, you should know your net worth just got a big boost. It comes in the form of rising home equity. Equity is the current value of your home minus what you owe on the loan. It turns out that this number has been growing recently thanks to low housing supply and high buyer demand.  Today, you’re building that equity far faster than you may expect – and this gain is great news for you. In fact, the average homeowner gained more than $55,000 in equity over the past year.

Here’s how it happened. Home values are on the rise thanks to low housing supply and high buyer demand. Basically, there aren’t enough homes available to meet this high buyer interest,  so bidding wars are driving home prices up. When you own a home, the rising prices mean your home is worth more in today’s market. And as home values climb, your equity does too.

In addition to building your overall net worth, equity can also help you achieve other goals like buying your next home. It works like this: when you sell your house, the equity you built up comes back to you in the sale.

In a market where you’re gaining so much equity, it may be just what you need to cover a large portion – if not all – of the down payment on your next home. So, if you’ve been holding off on selling and worried about being priced out of your next home because of today’s home price appreciation, rest assured that your equity can help fuel your move.

Equity can be a real game-changer if you’re planning to make a move or renovate your current home. To find out just how much equity you have in your home and how you can use it to your advantage, reach out to me today! 

The smart way to home shop.

Get pre-approved for a mortgage today!

If you’re considering buying a house, you’re probably wondering how much you can afford. The last thing you want is to fall in love with a house that ends up being out of your budget. Or even worse, to seal the deal on a house you can’t comfortably afford.

Many online calculators claim they can tell you how much you can afford, but for most home buyers, what they qualify for is often less (or different) than what their calculator guessed. So what’s a more accurate way to figure out your budget? Getting a pre-approval letter from an actual mortgage professional.

Our News

What are your 2021 home goals?

All of us here at MBA are excited about the opportunities this year will bring! You're likely already looking ahead with goals in mind. Rest assured that we're here to help you plan through all the changes and opportunities waiting for you. Ready to own? Turn your rent check into a mortgage payment. It's no secret that homeownership is the...

read more

The New Normal: A Strong Housing Market Expected to Continue into 2021

"2020 will be known for a lot of things, and a record-breaking year for real estate will certainly be one of its more unexpected legacies." —Daryl Fairweather, Economist Most of us would have expected the housing market to suffer from circumstances like a once-in-a-hundred-years pandemic and historic inventory shortages. But, rather than a...

read more

Is FHA Dead?

With so much hoopla surrounding changes “made” to FHA over the last few months, I want to touch on a few items before I address other misconceptions.The FHA loan is a loan that you get from a mortgage lender that is guaranteed by the Federal Housing Administration. My very first loan was an FHA loan. FHA loans have long been misunderstood by...

read more