You may have seen in the news recently that mortgage rates have been rising quickly, so I wanted to include an update for you along with your home listings. This past week, rates spiked to their highest level in nearly 2 years and only took 6 weeks to get there from the lowest in recorded history. Rates have gone up almost a full point since May 1, which means that future home buyers have lost about 10% of their purchasing power. Keep in mind that rates are comparatively still very low, and if you’ve bought a home before you already know that this higher rate (averaging about 4.25%) is very good compared to the 7-8% range we saw just a few years ago.
However, if you’ve been pre-qualified in the past few months, know that this 1% increase will affect the price range of homes you can afford. For example, if you were pre-qualified for a $300,000 home a few months ago, your purchase price will drop to about $270,000 (generally a 10% loss) in order to have the same monthly payment you’ve discussed with your lender.
If we need to adjust the price of your saved home search, just let me know. Or, if you want to touch base with our in-house lender to see what price range you should be browsing, here is Joel’s contact info:
Joel Greer with Carolina One Mortgage
Email: Joel.Greer [at] gbmail.com
Office phone: 843-414-2489
We’re happy to answer any Charleston real estate related questions you may have, so contact us when you’re ready!