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From historic elections to shocking sports upsets to bizarre weather patterns, 2016 seemed to leave everyone’s head spinning. And while the Internet may have you believe Kylie Jenner’s new lip color was the most culturally relevant headline of the year, the truth might have to do a little more with math and a little less with celebrity gossip.
In our industry, 2016 made home buyers sit up and take note: the market saw healthy increases, promising numbers, and plenty of inventory. Low interest rates, strong wage growth, and an increase in millennial home buyers were just a few factors that pushed the market to new heights.
But the optimistic forecasts seemed to grind to a halt when November showed a sharp spike in mortgage interest rates. For those looking to buy a home for the first time, this led to a whole new line of questions: Where are rates headed? What does this spike mean for first-time buyers? When is the best time to buy?
We’re here to help make sense of the mortgage puzzle. Keep reading to learn why now is the time to buy...especially if you’re a first-time buyer in New Braunfels!
Where are the rates headed?
So, we’ve established that mortgage rates have been on the rise. Towards the end of the year, 30-year fixed rates reached above 4% (up from 3.47% at the end of October). While many blamed the outcome of the presidential election for this spike, the Mortgage Bankers Association had already predicted that rates would increase significantly heading into 2017.
Experts have predicted that rates will continue to rise in 2017, likely remaining above 4% for most of the year...maybe even reaching towards 5% by the time 2018 rolls around.
What does this mean for you?
So what do these rate changes mean for the average New Braunfels homeowner? As prices are only expected to rise in 2017, you’ll receive the lowest interest rate possible now. The sooner you sign, the lower your rate will be. If you’re looking to get the best deal on a home, we recommend contacting a lender as soon as possible to get started on the mortgage process.
A Look at New Braunfels Neighborhoods
2142 Wiltshire Drive costs $1,262/month
2073 Pecan Gable costs $1,834/month
1355 Flaming Oak Dr costs $2,168/month
410 S Santa Clara Ave costs $2,352/month now, but may cost $2,471/month when rates go up.
513 Persimmon Trail costs $4,947/month now, but may cost $5,196/month when rates go up.
The Bottom Line
If all this mortgage jargon is making you want to take a big, long nap, don’t be scared off just yet. As a team of experienced and passionate REALTOR®s, our goal is to make it easy (and cost effective!) to find your perfect home...even after the madness of 2016. Click here to download this FREE Buyer’s Guide, customized for the San Antonio metro area buyer. You’ll find valuable information about finding a REALTOR®, connecting with lenders, making an offer, closing costs, and way more.
*Note: all prices have been calculated assuming a 30-year fixed mortgage, 20% down payment, property taxes, and home insurance. “Before” numbers were calculated with current rates (4.09%), and “after” numbers were estimated using a forecast of 4.75%.
