What Does This Mean to You Now?
Your purchase price approval amount, issued by your lender, just went down. For every 1% increase in interest rate, there is a 10% reduction in your new pre-approval amount.
Favorable economic data released this week caused interest rates to rise a bit. The Consumer Confidence Index jumped to its highest level since 2000. Record high stock market, low unemployment, and potential tax reforms are some of the contributors. Sales in October for the under $1,000,000 price point increase to its highest level since 2007 however the over $1,000,000 remains a bit sluggish.
In the examples below, we will look at what this translates to at a price point of $700,000 (which is the median price in North West Bergen County).
- 1% Increase allows you to purchase a home for $630,000
- 1/2% Increase allows you to purchase a home for $665,000
- 1/4% Increase allows you to purchase a home for $682,500
While most buyers are waiting for the “spring” inventory it just might behoove you to get in the game now. The benefit of proper timing and positioning could gain you better results than those who wait.
