We’ve gotten a lot of mortgage questions recently, so I wanted to take a minute to explain the hype about the very low interest rates we’re seeing right now (rates are holding steady around the 3.5 to 4% range). A 1% change in interest rate produces a 10% change in purchasing power. So, for example, let’s say that you can afford a $300K home at a 4% interest rate. If interest rates go up to 5%, you’ll only be able to afford a $270K home. In other words, you’ll be making the same monthly payment, but more of that money will be spent paying interest rather than the house itself.
Although interest rates are expected to remain low over the next year, home prices are not in the Charleston real estate market. In fact, Charleston’s prices have risen 6% so far this year. As we continue with an unusually busy holiday season, it’s expected that this steady demand we’re seeing will continue to raise prices over the next 6 months as buyers take advantage of today’s combined low interest rates and home prices.
If you’re interested in finding out how much you’ll be able to afford based on the current interest rates, I have included the contact info for our in-house lender:
Joel Greer with Carolina One Mortgage
o: 843-414-2489 / c: 843-327-1575
And when you’re ready to start scoping out neighborhoods and to see firsthand what homes in your price range look like, we’re here to help!