30-Year Fixed Rates Rise, But It's Still A Great Time To Buy
30-Year fixed rate mortgages rose to their highest levels since March of this year according to the most recent Freddie Mac Survey. The average 30-Year fixed rate rose to 4.98% for the week ended May 21st.
If you listen to the media you would think that this could signal the end of any kind of hope for economic recovery. But let's take a look at the facts.
Fact: The average rate rose from an average of 4.82% to 4.98%.
This means the monthly principal and interest payment on a $150,000 30-year fixed rate mortgage increased from $788.81 per month to $803.40.
Fact: Housing prices dropped an estimated 20% last month compared to the same period last
This means that the home you can buy now for $150,000 would have cost $187,500 this
time last year. Following this example further indicates that even with the increased rate,
your payment on this house would only be 803.40 at the $150,000 compared to
at last years price.
Bottom Line: Mortgage interest rates are still near historic lows and housing remains affordable. Factor in government incentives such as the $8,000 First-Time Homebuyer Tax Credit and it adds up to a great time to buy.
To find out why now is a great time to buy and to receive your fret Cost Of Waiting Analysis
Jim McLendon, MBA
McLendon Mortgage Company