Brexit Effect On Mortgage Interest Rates In The USA
Dated: October 22 2016
At the beginning of the summer, the U.K. voted to leave the European Union. This became known as "Brexit," and it has created a lot of uncertainty and worry for our neighbors across the Atlantic.
Here in the U.S., though, Brexit has been nothing but good for our real estate market. Because of Brexit, investors all over the world want a safer place to invest, and this has pushed already-low mortgage interest rates down even further because they are investing in our housing market.
In fact, we are now in the middle of the second-longest run of cheap mortgage rates in history. Currently, the 30-year fixed-rate mortgage is 3.46%; this is only a few points above its all-time low of 3.31%.
What does all of this mean for you?
First, if you are looking to buy a home, now is an unusually good time to do so because these low rates mean you will be paying less. As an example, if you were to take out a 30-year, $250,000 mortgage today versus a year ago (when interest rates were almost 4%), you would save more than $25,000 over the lifetime of the loan.
Another way to look at it is that at today’s rates, you can afford a more luxurious home without paying more. For example, if you were to take out a 30-year mortgage, you could now afford $15,000 more for a home than you could a year ago while keeping the same monthly payments.
Or, to look at how rates affect a fixed payment, see the chart below which shows what impact rising interest rates would have if you planned to purchase a home within the national median price range, and planned to keep your principal and interest payments at or about $1,100 a month.
Clearly, this is a great opportunity.
If you’re curious about which homes are available for sale in the greater Palm Springs area right now, CLICK HERE TO SEARCH HOMES.
Now, if you are looking to sell rather than buy, these low rates also benefit you big time. The more the mortgage rates drop, the larger the population of qualified buyers is, and the greater the demand is for homes.
This healthy demand keeps up the price of your home and ensures your home will get sold quickly. Not surprisingly, pending home sales are up by 1.3% this summer and are now at the second-highest level in over a decade.
If you’d like to know how much your home might be worth in the current market, I have a great tool I’d like to share with you called Market Snapshot. To use this tool, simply enter your address and some attributes of your home, and then we will provide you with a list of all of the homes that are currently on the market in escrow and homes that have sold in your specific area. This will give you a good idea of the value of your home.
As you can imagine, these ultra-low mortgage rates won’t last forever and will rise sooner or later. So take advantage of this amazing opportunity now!
Ranked in the top 1% of all agents valley wide and named one of the Palm Springs Life Top Realtors for 2019, 2020, and 2021; Will is an Associate Broker/Team Leader of the WILL COOK GROUP with Keller ....
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