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What Record Low Interest Rates Means for Buyers

May 29, 2020
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Perhaps you have been contemplating the purchase of one of the new homes in Gig Harbor WA this year, but wonder if now is the right time. It turns out that now is potentially one of the best times to buy, thanks to low mortgage interest rates. You have the potential to get more home for your money and lock in a great rate.

Right now, the average rate on a 30-year mortgage is around 3.7 percent. The lowest the rate on a 30-year mortgage has been in the past 20+ years is 3.5 percent, meaning it’s unlikely that rates are going to go much lower at this point. Rather than trying to hold out for even lower rates, it’s probably best to lock-in this already exceptionally low rate.

For one thing, with it being a buyer’s market, you may find fewer homes available in your price range as others snap up available homes. Plus, while rates have dropped, home prices have held fairly steady and still see some appreciation, so if you don’t act soon, the difference you make in savings on the mortgage may be off set by higher home prices. Still, with the rates being so exceptionally low, you’re still coming out ahead in savings compared to even a year ago.

Say you have an income of $100,000. If you have a lender who doesn’t want your mortgage to be more than 28% of your income, you’re still looking at a maximum 30-year mortgage of more than $500,000 with an interest rate around 3.7 percent. Just a few years ago, with the same income, but an interest rate of 6.9 percent, you would have only been able to get a maximum mortgage of roughly $350,000. This shows you just how much more home you can get for your money right now.

Ultimately, if you’ve been considering purchasing one of the new homes in Gig Harbor WA, or other communities in the Puget Sound, Southwest Washington, or Portland, now is a great time to act. We have a number of move-in-ready homes available, pre-sale homes, and we will also work with you to build on your own land. With these historically low rates, you can get much closer to having your dream home at an affordable price. Take advantage of the low interest rates to make the most of your money and let us help you make the most of your new home.

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This post was written by Garrette Custom Homes

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