Yesterday, the Federal Reserve announced its decision to raise short-term interest rates for the first time in 2016, and just the second time this decade. If you are considering buying a new home in Florida, you may be wondering just what this means for you.
First, understand the short-term rate is not the same as a mortgage rate, thought certainly will have an effect. Gradually, this increase will push up everything from mortgage rates to credit card rates, and on the positive side for those with money in the bank, bank savings account rates.
The Federal Reserve’s decision to increase short-term rates is a positive indicator for the economy as a whole. It indicates economic growth, and an increase in employment in our country. The Fed hinted they will raise rates three more times in 2017.
What This Means for Homebuyers
The Fed rate hike wasn’t exactly a surprise; this has been hinted at for months and average 30-year fixed mortgage rates already climbed from 3.47% to 4.16% since late October, in anticipation of the Fed rate hike.
Comparatively, the average mortgage rate was 3.97% a year ago, and a 2016 low of 3.41% in July. Yes, rates have gone up, some. But in the big picture, we are still in an era of historic low mortgage rates, with rates averaging 6.29% in the 2000’s and a whopping 12.70% in the 1980’s.
So, let’s get down to the nitty gritty. If you have been on the fence about buying a home, NOW is the time to buy and lock in today’s still historically-low mortgage rates!
As of today, 30-year fixed mortgage rates average 4.16% (source: Freddie Mac). If you were to purchase a home today and finance it with a 30-year mortgage for $200,000, it will cost you just $973 a month for the mortgage principal and interest.
In comparison, when mortgage interest rates go up by another 0.5%, this same mortgage will cost you $1,032 per month — a $59 monthly increase. And a 1% rise in rates, as could happen over the next year, will increase your mortgage payment to $1,093 per month for the same loan — or $120 more. We should mention, these numbers don’t account for rising home prices here in Florida — with Tampa home prices rising about 18 percent in the last year, purchasing a home is only going to get more expensive.
It’s Time to Make Your Move
Very simply stated — if you have been thinking about buying your first home, moving into a larger home, or even refinancing your current home, do not wait.NOW is the time to lock in your most affordable mortgage rate and monthly payment.
Highland Homes builds new homes designed for your life in Tampa Bay, Polk County, Metro Orlando, Manatee County, and Ocala, Florida. Whether you are seeking a low-maintenance townhome or spacious estate home on acreage, we have homes in desirable neighborhoods to meet your needs. Choose from more than 30 stylish home plans priced from the mid $100’s to $300’s and personalize your home with hundreds of available design options to truly build the home you have been dreaming of — at a payment affordable for your budget!
Call us at 863-797-4999 or visit the Highland Homes website to find your dream home in Florida and take advantage of today’s still low interest rates before they continue to rise.
Mortgage interest rates, terms, down payment and qualification guidelines vary per loan type and are based on your credit and other qualifying factors. Get pre-qualified today and discover your buying power by contacting a Highland Homes preferred lender.
Location, home designs, features and prices are subject to change without notice. We are pledged to the letter and spirit of the U.S. policy for the achievment of equal housing opportunity throughout the Nation. We encourage and support an affirmative marketing program in which there are no barriers to obtaining housing because of race, color, religion, sex, handicap, familial status or national origin.