Don't wait - low mortgage rates won't last!

 Today's Denver Post included an article titled "Is the door closing? After reaching record low, mortgage rates rising fast."  After years of incredibly low mortgage interest rates, are we seeing a sustained rise in rates?

When I purchased by first home in the late 1980s, the rate was 12%.  My wife's first home purchase carried an adjustable rate in the upper teens.  To most of today's buyers those numbers are hard to believe, as they have gotten used to rates in the 4 - 5% range.   We recently had a client who purchased a brand new home with a 30-year fixed rate mortgage of just 3.875%!  Even with recent increases (nearly a half point in the last month) mortgage interest rates are still historically low, and combined with lower home prices the "affordability" of home ownership is better than ever.

According to the Post's article, rates have climbed from 4.17% on November 11 to 4.61% on December 9.  Looking at that increase in terms of real world impact, for a $400,000 purchase with 20% down, this would increase your payment by about $83 per month ($996 annually).  Alternatively, without changing your payment, the mortgage rate increase would decrease your purchase price from $400,000 to $380,000.

I heard another agent recently tell a group that, "when you wait for the bottom of the market, you usually get the bottom of the barrel."  Trying to time the bottom of the mortgage market is incredibly difficult, if not impossible.  If you are in the market for a new home, now is a great time to look.  Don't wait too long, or you may get shut out!