The national real estate news is all about the interest rates. The Federal Reserve is purchasing fewer mortgage-backed securities, which should have bounced the rates up.
But to the contrary, the rates are around 4%. To that point, the home sales are down as well. So there may be a strategy with the lower rates to increase home sales.
Is it time to buy a home? Check out these considerations.
- Low home prices
- Low interest rates
- Future appreciation because prices are expected to increase by about 4.3% in 2015
- The supply of homes has increased.
- Las Vegas home prices are below the national median
- A mortgage is cheaper than rent
Las Vegas Market Statistics
Las Vegas had 3,888 recorded resales in June. The sales for the first six months amounted to 18,375. That is a year-to-year decrease of 17%. Fannie Mae is projecting that there will be a rebound through the rest of 2014 and continuing through 2015 with a 5.3% increase in sales.
Our median price of a single-family home was $165,000. That is a year-to-year increase of 3%. The national median price is $208,000. With the 4.3% forecasted for 2015, the median will increase to $218,000.
More Home With Low Rates
You can purchase “more home” with low rates. According to John Moony, managing vice president of Guaranteed Rate, a national mortgage company based in Chicago, a 1% increase in the interest rate equates to a 10% reduction in your purchase power. That means that if you want your mortgage payment below $1,500, for example, you can buy a home for $300,000 at today’s rate. If you wait until the rate goes up 1%, your price goes down to $270,000. See the example below.
The Buying Power Of "NOW"
Example of payment difference: $300,000 at 4% equals a payment of $1,432 principal and interest. $300,000 at 5% equals a payment of $1610 principal and interest. The price would have to be reduced to $270,000 at 5% to have the payment of $1,449.
This indicates that today is the time to buy!
Check out my mortgage calculator.
Information Sources: Dennis Smith of Home Builders Research, Neil Cavuto of FOXBusiness, John Moony of Guaranteed Rate, and Teke Wiggin and Lawrence Yun of the National Association of Realtors.
