Almost one year ago one headline read “Home Sales Tumble As Mortgage Rates March Upward”.
The main culprit last February was affordability which was based on rising interest rates. To begin 2018 30-year fixed mortgage rates climbed to 4.4% and continued to rise throughout the year, even breaking the 5% barrier for the first time since the previous decade.
You may have noticed that rates unexpectedly softened a bit to end 2018 and according to Bankrate.com the 30-year fixed mortgage was down to 4.59% by the middle of January 2019. Now in to the fourth week of this new year we see them pretty much holding steady.
Could we see rates continue to fall? Anything is possible but it’s unlikely. Tax reform kicks in this year and we’ve seen the stock market stabilize recently. Most economists I’m reading are saying long term rates will rise in 2019 and some even saying we’re due for an economic downturn.
If you are on the fence about buying a home here in early 2019 keep this number in mind. If rates increase just half a point your purchase power drops by $40,000.
I see three things converging at the moment. First, home prices have leveled off and even dropped in some markets, rates are down, and the buying season hasn’t started yet. Those factors compounded by a motivated seller could mean right now is a great time to buy your next home.
For a free consultation and loan pre-qualification click here and type Pre-qualification in the subject line. It’s never too soon to have that conversation.