Interest Rates Increasing This Year – Advice For 2017 Home Buyers In Southern CA

Interest rates have gone up over the last several months. Mortgage experts expect that it will likely rise further during 2017. This is critical news for those who intend to find a property this year. Interest rates increasing this year and advice for 2017 home buyers in Southern CA is discussed further in this article.

Impact of Interest Rates Increasing This Year

Interest rates are used to determine monthly home ownership costs. Increases in interest rates mean that you will be approved for less money and/or pay a lot higher for the same home. Even an incremental surge will result in a difference. If you are looking for a house at the high end of the price range, a little change might really impact you.

Here is an example of how purchase maxes may move with interest rates. This assumes a set down payment percentage and keeping the same mortgage payment.

Interest Rate Price Max
4.00% $449,773
4.25% $436,494
4.50% $423,791
4.75% $411,636
5.00% $400,000

Additional Affordability Factors

In addition to interest rates, movement in real estate values will also make a big difference. In many areas, property prices have been increasing consistently. Bidding wars and offers above list price are the norm again. A lot of this comes from low inventory and high demand.

Advice For 2017 Home Buyers In Southern CA When Weighing Buying Now or Later

Inclining interest rates and real estate prices both have a negative impact on buyers. People will find that their price point is less as the trend continues. The condition of properties within reach will lessen too. With both of these in play, there is little benefit to procrastinating a home.

About The Spring Housing Market

Spring is often the busiest time of year for real estate. There will be more homes for sale to accommodate the growing demand, but competition will be fierce as well. Buyers choosing to purchase can take advantage of still fairly low interest rates. Expected improvements in property values will offer a chance to realize equity more rapidly than typical.