It’s no surprise you’ve heard about the historically low interest rates, but what have you heard about the housing market? If you’re looking to sell, there couldn’t be a better time. According to the Boston Globe*, “The number of homes for sale in Massachusetts is at an eight-year low, despite an increasing number of prospective buyers and housing market that — overall — is on the mend.” When the demand is high and the supply is low, can you guess what that means for you as a home seller?
It means a highly competitive housing market and stronger offers! Lots of competition means lots of offers for your home. Plus, when the inventory is slim, buyers are more likely to put their best foot forward to buy the home they want.
Now, if you’re a buyer, don’t think this is bad news for you. Yes, there is more competition, but YOU have more buying power than ever before.
It all comes back to interest rates. When you pay less to borrow, you can spend more on the home you love as your qualifying mortgage payment puts you into a higher home buying bracket. Here’s The Wall Street Journal’s take on the rock-bottom interest rates and their effect on home purchasing.
The impact of low mortgage rates is profound. Before the Fed began buying mortgage-backed securities in late 2008, rates for 30-year fixed mortgages stood at around 6.1%, and a borrower who could qualify for a $1,000 monthly payment could get a $165,000 mortgage. Today, that same borrower, at a 3.5% rate, can borrow as much as $222,000
So, remember that dream house you wanted 5 years ago and just couldn’t afford? Now you may be able to! These historically low interest rates are great for everyone. Remember, if you’re a seller, you may become a buyer again soon!