Though it appears that we are on the tail end of the recession, many of us are hesitant to make large financial leaps. If you are thinking of buying a home, rising interest rates could be your best reason to get off the fence and act quickly.
Interest Rates
Interest rates have been near 5% for the last several months and have been rising slightly over the past several weeks. The graph to the right shows that an increase in just one or two points can diminish your purchasing power by $100,000 or more.
In addition, the cost of borrowing money is on the rise. A homeowner with a $350,000 loan will pay $7,000 more in interest if rates rise from 5% to 7%.
Home Prices
Because of moderating home prices, we are seeing greater home affordability. However, high demand created by home buyer tax credits could cause home values in the lower price ranges to rise within the year, resulting in a ripple effect up the price points.
Interest Rates
Interest rates have been near 5% for the last several months and have been rising slightly over the past several weeks. The graph to the right shows that an increase in just one or two points can diminish your purchasing power by $100,000 or more.
In addition, the cost of borrowing money is on the rise. A homeowner with a $350,000 loan will pay $7,000 more in interest if rates rise from 5% to 7%.
Home Prices
Because of moderating home prices, we are seeing greater home affordability. However, high demand created by home buyer tax credits could cause home values in the lower price ranges to rise within the year, resulting in a ripple effect up the price points.
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