Interest Rates and Home Prices to Increase by End of Year

    Now is the Time to Buy a Home

    If you have been thinking about buying a home in the Minneapolis area, now is the time. It’s predicted that lending rates and home prices will increase by the end of the year. As of now, interest rates are averaging 3.75% and these rates are expected to rise to nearly 5% by the end of the year.

    Let’s look at an example of how waiting can really affect your purchasing power. Say you want to keep your mortgage payment around $900 a month — here are two scenarios:

    Example 1: Purchasing a home with today’s rates

    • Monthly mortgage payment of approximately $895

    • 3.75% Interest Rate*

    • Estimated home purchase price in this scenario: $200,000

    Example 2: Waiting to purchase a home

    • Monthly mortgage payment of approximately $895

    • 5% Interest Rate*

    • Estimated home purchase price in this scenario: $172,500

    An increase in percentage rate decreases your purchase power by $28,500.

    Think of how much more house you can purchase by taking advantage of roughly 1% less in interest rates? Call us today if you need more information. Whether you are looking to buy, sell or invest in Minneapolis, Maple Grove, Plymouth, Minnetonka, Eden Prairie or the surrounding areas, count on us as your local real estate professionals. 

    Rates and prices rising | House Hunters Minnesota*Interest Rates and APR may vary based on credit history and other factors. Figures based on FHA financing with 3.5% down payment. Taxes and insurance not included in quoted monthly payment.

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