You Should Be Buying or Selling Your Home NOW! (BLOG)

Take a look at the attached photo. It is a recap of what interest rates have been doing since 1992, when rates were in the 9-range. Almost seems impossible to believe, right? But you only have to go back to 2006-2007 to see that rates were close to 7% then.

So right now, they are trending below 4% for a 30 year mortgage, but myself and many others that track these sorts of things believe the ride we have been on is coming to an end. Now, I am not suggesting we will go back to 9% tomorrow, but I do feel the downward movement is over and if that is true, then those who have been waiting for rates to hit the bottom can't stop waiting and start to act.

Rates make a hue difference on what buyers can afford. This is important to both buyers and sellers. When you are selling, you want rates to be low, so more people can afford your home. When rates go up, your buyer pool gets smaller. Likewise, when you are buying, you want rates as low as possible as it allows you to be able to buy more home.

Let's use the following example to illustrate what this really looks like. Let's pretend you set a budget of $1500 per month to spend on a home and you are shopping for that home today. You find a great $300,000 house and buy it. You are thrilled because your $1500 per month went a long way.

Now, lets go back to 1992 when rates were close to 9%, and you still want to spend the same $1500. Based on that rate, what is the most expensive home you can buy for that payment? You will be looking for something in the $170,000 to $180,000 range!

See what a huge deal rates are? At a 9% rate you are shopping for a MUCH different home, then you are at a 4% rate. Buying and selling when rates are low just makes sense, and that time is now.

Rates are on the rise, and they will start to creep back up to where they previously were on this graph.

The time of waiting on rates to hit bottom is over. In my opinion that bottom is here and they are on the way back up as we speak. If you are wanting to buy or sell, the time to take action is now!

Mark Charter is a licensed real estate agent and resident of Ankeny. Mark is the most recommended real estate agent in Central Iowa according to Trulia.com, to learn more about Mark and his team, please visit MarkCharter.com