Interest Rates-What Experts are Predicting for the Next 12 Months

Where Will Interest Rates be a Year from Now?

There are four major analysts that make future projections on interest rates ‐ Fannie Mae, the National Association of Realtors, Freddie Mac, and the Mortgage Bankers Association. These aren’t 4 guys just sitting around smoking cigars and throwing a dart at different numbers on a dart board to come up with their prediction. These groups have lots of number crunchers and support staff that are constantly looking at the data. We can see that each of them project that interest rates are going be about one or even greater than one percent higher this time next year. A one percent increase might not seem to be that much, but in actuality a one percent increase in interest rates dramatically impacts a mortgage payment.

How These Predictions Impact a Monthly Mortgage Payment

The chart above shows someone taking out a $250,000 mortgage to purchase a house today at a 4.22% interest rate resulting in a monthly payment of $1,1225.46.
Now look at the bottom part of the chart showing the buyer taking out the same mortgage amount ($250,000) at 5.3% interest resulting in a monthly payment of $1,388.26. The monthly difference increases the payment by $162.80 every month!

Math Break -$162.80 x 12= $1,953.60 per year increase in payment.

$1,953.60 x 30 years=$58,608.

The Cost of Money and the Cost of Waiting

Money is just like any other item you might buy. When you buy money is where you can win or lose.
When is the best time to buy Halloween candy, the week before Halloween … or the day after?
We all know the best time to buy Christmas wrapping paper, etc. is the week after Christmas … but how many of us do it?

There are real cost savings and opportunities for those who take action in the next couple of months.

Tips if You Can See Yourself Buying Within a Year

Educate yourself about the real estate market. A good place to start is our Doorsteps program. Doorsteps is an online home buying course you can take at your own speed. Tons of useful information in a easy-to understand format.
Understand the difference between traditional real estate agents and Exclusive Buyer Agents who only work for Buyers.
Download our mobile app that puts the MLS on your smartphone. It’s updated every 24 hours.
Call Finding Homes for You for more information at 636-532-4200.