The media has recently been abuzz with the news of the continuation of our nationally historically low interest rates. With a current rate at 3.5%, the environment for buying a new home has never been better. Because of these low interest rates, inventory in Omaha has dropped over 30% to around 3000 homes currently listed compared to 4500 homes on the market at this time last year. Many people are taking advantage of these rates by buying new property or refinancing their existing properties, but what exactly do these low interest rates mean to you? We have the numbers.
You may hear that interest rates are extremely low, but how does this actually affect payment plans? We’ve done the math for you. Today, with the current interest rate of 3.5%, you can purchase a $150,000 home for only $1100 a month. Five or six years ago, that same $150,000 property would cost $1500 a month. That’s a $400 a month difference, which is a savings of $4800 a year. With a 30-year mortgage you can see that this difference is astronomical!
A $200,000 home at an interest rate of 3.5% figures out to be around $1450 a month, while a $300,000 property is just about $2000 a month. An easy way to figure how much your monthly payments will be is to use the “rule of $10,000.” This technique in determining buying power is for every $10,000 increased or decreased at the current rate of 3.5% your monthly payment will be affected by about $35. (This technique is used only to calculate the monthly payment; it does not take into effect the insurance or taxes paid on the property. The higher priced the property, the higher the insurance and taxes will be.)
If you are considering purchasing a property, now is a great time. With low interest rates and 3-7 months’ worth of inventory on the market, you will be able to find the perfect house for you at a great price. If you are looking to sell, now is a terrific time too. You will be able to get your hold sold quickly and at the price you are looking for. If you are looking to buy or sell or have any real estate questions, give us a call at (402) 957-1116 or email us at info@OmahasElite.com. Thank you and we look forward to working with you!