Interest rates have been kept artificially low for several years by the Federal Reserve in an effort to strengthen the economy. Policy is shifting to allow them to seek their own natural level and that will surely result in higher mortgage rates. Rates on 30 year fixed mortgages are up over 1% from January, 2013.
Foreclosure activity is down, new home starts are up and prices have been increasing in most markets for two years. Most experts agree that the cost of housing is going up.
If the price were to go up by 2% and the mortgage rate by 1% while a buyer is “sitting on the fence” making a decision, the payment would go up by almost $175.00 each and every month for the term of the mortgage. Even if a person can afford to make the higher payments, what could they have done with that extra $175.00 a month? Buy furniture? Car payment? Principal reduction? Retirement contribution? Save for a rainy day?
Click here to determine what the cost of waiting to buy will be using your price home.
Inventory is extremely low in most towns; only 44 single-family homes for sale in Sudbury, 17 in Wayland; and 15 in Maynard. I will be posting and emailing market updates in the next day or two.
Low inventory makes this a very good time to put your house on the market before the spring becomes more competitive as more people decide to sell. And you will have the edge on other buyers who still need to sell in order to move forward.
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