Today I’m joined by Matt Mieras from CMG Financial to talk a little bit about some recent changes in interest rates that are impacting the real estate market.
In November, we hit an eight-year high for interest rates, but over the course of the last six months, they have dropped to two-year lows. Last November, the average rate was around 5.25%, but it has since dropped to between 3.75% and 4%.
Every 1% decrease in interest rates equals a 10% increase in buying power, so this drop is great news for homebuyers. On a $200,000 loan, that’s $150 a month in savings, and $400 per month for a $400,000 home.
In other words, buyers that could only afford $360,000 last November can now afford over $400,000, which opens up a considerable amount of options for them.
The great thing about this is that it already has and will continue to help the home buying market speed up. This will help with appreciation in home sales and help home sellers get their properties sold quickly. We’re in a really great spot right now for both buyers and sellers and will continue to be until rates start to hike again.
If you have any questions for Matt, don’t hesitate to give him a call at (843) 670-5512 or send him an email to MMieras@cmgfi.com.
If you have any real estate-related questions for me, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.