Wednesday, October 8, 2014

Taking a Look at Past Interest Rates

There are many great Orange & LA County area homes for sale. Click here to perform a full home search, or if you're thinking of selling your home, click here for a FREE Home Price Evaluation so you know what buyers will pay for your home in today's market. You may also call me at for a FREE home buying or selling consultation to answer any of your real estate questions. 

There's been quite a bit of speculation about whether interest rates are going to rise soon. While everyone agrees rates will rise sometime next year, no one really knows when. One thing we do know is that rates are currently at historic lows. Based on a $200,000 home and a 30-year fixed-rate mortgage, we put together this chart to illustrate how lucky we are right now:
  • 1970s: The average rate was 8.86%, the average payment was $1,589
  • 1980s: The average rate was 12.7%, the average payment was $2,166
  • 1990s: The average rate was 8.12%, the average payment was $1,484
  • 2000s: The average rate was 6.29%, the average payment was $1,237 
  • Today: The average rate is 4.10%, the average payment is $966

Even with rates expected to rise, we are in great shape historically. If there is a one point increase, rates will still be well below the average of the last four decades. The market is in a strange place right now - prices are softening, inventory is starting to rise, and interest rates are incredibly low. Really, it's a fantastic time to look for a home.

One thing to think about, however, is the potential for rates to rise more than a single point. If the past decades tell us anything, it's that rates are never this low and if they are, they don't stay low. Years from now, people won't be talking about the price they got for their home, but the interest rates they were able to lock in!

Whether you're refinancing, downsizing, or upgrading, now is the time to lock in an incredibly low interest rate and increase your future spending power. Low rates make or break what you're able to afford payment-wise, so give us a call and we'll set you up with some great lenders. We look forward to hearing from you soon!