{"id":1584,"date":"2021-03-30T14:13:52","date_gmt":"2021-03-30T14:13:52","guid":{"rendered":"https:\/\/phphouses.com\/blog\/?p=1584"},"modified":"2021-03-30T14:15:42","modified_gmt":"2021-03-30T14:15:42","slug":"change-mortgage-rate-impacts-homebuying-budget","status":"publish","type":"post","link":"https:\/\/phphouses.com\/blog\/change-mortgage-rate-impacts-homebuying-budget\/","title":{"rendered":"How a Change in Mortgage Rate Impacts Your Homebuying Budget"},"content":{"rendered":"
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How a Change in Mortgage Rate Impacts Your Homebuying Budget<\/p><\/div>\n

Mortgage rates are on the\u00a0rise<\/a>\u00a0this year, but they\u2019re still incredibly low compared to the historic\u00a0average<\/a>. However, anytime there\u2019s a change in the mortgage rate, it affects what you can afford to borrow when you\u2019re buying a home. As Sam Khater,\u00a0Chief Economist<\/em>\u00a0at\u00a0Freddie Mac<\/em>,\u00a0shares<\/a>:<\/p>\n

\u201cSince January, mortgage rates have increased half a percentage point<\/strong>\u00a0from historic lows and home prices have risen, leaving potential homebuyers with less purchasing power.\u201d (See graph below):<\/em><\/p><\/blockquote>\n

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2021 Mortgage Rates<\/p><\/div>\n

When buying a home, it\u2019s important to determine a monthly budget so you can plan for and understand what you can\u00a0afford<\/a>. However, when you need to stick to your budget, even a small increase in the mortgage rate can make a big difference.<\/p>\n

According to the\u00a0National Association of Realtors<\/em>\u00a0(NAR), today, the median existing-home price is\u00a0$313,000<\/a>. Using $300,000 as a simple number close to the median\u00a0price<\/a>, here\u2019s an example of how a change in mortgage rate impacts your monthly principal and interest payments on a home.<\/p>\n

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Buyer’s Purchasing Power<\/p><\/div>\n

If, for example, you\u2019re getting ready to buy a home and know your budget allows for a monthly payment of $1200-1250 (marked in gray on the table above), every time the mortgage rate\u00a0increases<\/em><\/strong>, the loan amount has to\u00a0decrease<\/em><\/strong>\u00a0to keep your monthly cost in range. This means you may have to look for lower-priced homes as mortgage rates go up if you want to be able to maintain your budget.<\/p>\n

In essence, it\u2019s ideal to close on a home loan when mortgage rates are low, so you can afford to borrow more money. This gives you more purchasing power when you buy a home. Mark Fleming,\u00a0Chief Economist<\/em>\u00a0at\u00a0First American<\/em>,\u00a0explains<\/a>:<\/p>\n

\u201cMonthly payments have remained manageable despite soaring home prices because of\u00a0low mortgage rates<\/strong>. In fact, monthly payments remain below the $1,250 to $1,260 range that we saw in both fall 2018 and spring 2019, but they are on track to hit that level this spring.<\/em><\/p>\n

Although they remain low, mortgage rates have begun to increase and are expected to rise further later in the year<\/strong>, thus affordability will test buyer demand in the months ahead and likely help slow the pace of price growth.\u201d<\/em><\/p><\/blockquote>\n

Today\u2019s mortgage rates are still very low, but experts\u00a0project<\/a>\u00a0they\u2019ll continue to rise modestly this year. As a result, every moment counts for homebuyers who want to secure the lowest mortgage rate they can in order to be able to afford the home of their dreams.<\/p>\n

Bottom Line<\/strong><\/h3>\n

Thanks to low mortgage rates, the spring housing market\u2019s in bloom for buyers \u2013 but these favorable conditions may not last for long. Let\u2019s connect today to start the homebuying process while your purchasing power is still holding strong.<\/p>\n

Contact us:<\/strong>
\nPHP Houses
\n142 W Lakeview Ave
\nUnit 1030
\nLake Mary, FL 32746
\nPh:\u00a0(407) 519-0719<\/span>
\nFax:\u00a0(407) 205-1951<\/span>
\nemail:\u00a0info@phphouses.com<\/p>\n

Let\u2019s Connect:<\/strong>
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THE INFORMATION PRESENTED IN THIS ARTICLE IS FOR EDUCATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSIDERED LEGAL, FINANCIAL, OR AS ANY OTHER TYPE.<\/em><\/h6>\n","protected":false},"excerpt":{"rendered":"

When buying a home, it\u2019s important to determine a monthly budget so you can plan for and understand what you can\u00a0afford. Finish Reading How a Change in Mortgage Rate Impacts Your Homebuying Budget<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[36],"tags":[38,15,10,18,27,91,52,9,49,42,40,280,339,228,63,20,12,48,47,19,17],"_links":{"self":[{"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/posts\/1584"}],"collection":[{"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/comments?post=1584"}],"version-history":[{"count":1,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/posts\/1584\/revisions"}],"predecessor-version":[{"id":1588,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/posts\/1584\/revisions\/1588"}],"wp:attachment":[{"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/media?parent=1584"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/categories?post=1584"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/tags?post=1584"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}