The Federal Reservehas for some time been signaling that they will be raising interest rates in the fall or winter of this year. Just what does that mean to you? Quite simply, this represents a loss in buying power for all home buyers. As the interest rates rise, the cost of a mortgage rises along with them. For example, if the interest rate were to rise 1%, a $200,000 home would cost you $2,000 more each year than it currently does ---- just due to the increase in the interest rate on the mortgage.
Unless your income rises by an equal amount, you LOSE 1% of your purchasing power, in this example. The message? --- it's quite simple, now is a great time to buy if you are considering a home purchase in the near future. It's better to buy that home now as opposed to waiting until next year, based on the interest expense alone.