Here is some food for thought!!!!!!!!!!!!! If you’ve been considering purchasing a home, the time to buy is now, or it will cost you. That’s according to real estate site Zillow, which says that mortgage rates are expected to climb over the next several years and home values are increasing as well. “More often than not, buyers do not understand the profound effect of rising interest rates on affordability,” said Erin Lantz, vice president of mortgages at Zillow. “Many buyers associate a 1 percentage point interest rate change with a 1 percent change on a piece of clothing or the price of a car, when in fact they are very different.” As a rule of thumb, Lantz said, a 1 percentage point increase in mortgage rates reduces affordability by 10 percent. To demonstrate the potential impact on your pocketbook, Zillow calculated a 1 percentage point rise in interest rates on a 30-year fixed-rate mortgage on a typical home in 35 metropolitan areas, comparing your monthly mortgage payment if you bought now or waited a year. The calculation includes its projections for home prices next year. It said, “In the San Jose/Silicon Valley area, for example, potential buyers should expect to see a monthly payment increase of more than $700 if they waited a year to buy the same home they were considering today. By contrast, in St. Louis, the difference is only $65 per month.” Here are the numbers for some other cities on Zillow’s list: San Francisco – $556 more a month. Los Angeles – $478 more a month. Seattle – $299 more a month. New York –$201 more a month. Boston – $198 more a month. Portland, Ore. — $189 more a month.
Posted on: Fri, 08 Aug 2014 16:25:24 +0000
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