In mid-March, the Federal Reserve announced that it was raising short-term interest rates by one-quarter of a percentage point. The increase brought interest rates that banks use when they borrow from each other to a range of 0.75% to 1%.
Thirty-year fixed mortgage rates rose to around 4.30% following the Fed’s announcement. In the first week of April, however, those rates fell slightly to around 4.1%. These rates are still relatively low (anything under 5% is generally considered low), but they’re higher than they were a year ago. In April 2016, 30-year fixed mortgage rates were around 3.59%.
So what does the rise in interest rates mean for you if you’re planning to buy a home?
While the Fed does not directly set mortgage rates, its actions do affect the housing market. The increase in interest rates from 2016 to 2017 means that on a $690,000 home with 20% down, you will be paying around $150-180 more per month than you would have been a year ago. And of course, as the price tag of your potential home goes up, so does your loan amount. This means that a rate hike will hit more expensive locations harder.
Some economists are predicting that mortgage rates will continue to rise throughout 2017 and into 2018 and could reach as high as 5.5%. In addition, home prices are also expected to continue to rise, presenting a double challenge for prospective homebuyers.
But don’t be daunted - despite this challenging market, with an expert team behind you, 2017 could still be a good year for you to buy a home in San Diego! To get started on the right foot, hiring an exclusive San Diego buyer’s agent is more important than ever. As an experienced exclusive buyer’s agent in San Diego, I can help you work within your price point, understand the current San Diego market, and find your perfect neighborhood and your perfect home.
Exclusive Buyer Agentsdo not list homes for sale and never represent sellers. They have no "inventory" to try to sell you. They can represent you in purchasing any home. They are specialists at representing buyers only on the buyers' side of the transaction. Exclusive Buyer Agents work to get buyers the best price and terms when they buy a home.
If you have excellent credit and plan to buy a home or condo in San Diego County within 90 days, contact Justin Gramm to hire an agent on your side of the transaction. More about Justin Gramm on Google+. Call Justin at (858) 437-2662 or E-mail.