Valuable information to share with buyers and sellers.
Mortgage interest rates continue to remain at all-time lows, yet trends show that many potential homebuyers stand to miss out on the once-in-a-lifetime opportunity they present. According to a recent survey of nearly 500 visitors to Weichert.com, consumers may not fully grasp the significance of these rock-bottom rates.
While the survey shows that consumers are still responding to affordable prices, it also seems that they have become accustomed to low rates. For example, nearly half (45 percent) of those surveyed would view interest rates as high at 6 percent. However, when you consider that according to Freddie Mac interest rates topped 18 percent in the early 1980s and remained above 10 percent at the start of the 90s, a rate of 6 percent is actually still quite low historically.
Perhaps one reason buyers aren’t more motivated by low rates is because they don’t think they will rise. Of those polled, 56 percent said they don’t believe interest rates will increase in the next six months. Low rates may also not be resonating with buyers because they are unaware how even a modest rise in rate can significantly add to the total cost of a home.
In fact, a lower rate can often save a buyer thousands of dollars over the life of a loan and may even enable them to purchase a more desirable home. With rates as low as they are, in most cases buyers will save money even if home prices go down in the future.
