Interest Rates + Housing Availability = Affordability of the Home You Really Want

If you have been watching the housing market for the past few months, there is no doubt in your mind that there aren't many houses available, the prices are fluctuating and so are interest rates.  Just like back in the early 2000s, houses that came on the market didn't last long.  Interest rates were reasonable and then they plummeted to around 3%...and stayed there for a while.  But now, they are up around 6-7% and most people don't want to give up their 3% rate.  I don't blame them.

Every couple of months the Federal Open Market Committee, commonly referred to as "The Fed" meets.  So?  Why should I care?  Because "The Fed" looks at inflation and decides whether to raise or drop interest rates.  Lower rates = more affordable housing.  Lower rates = people willing to sell their homes and relocate = more homes on the market.

For example:  

A $400,000 home loan at 3% interest has a principle and interest payment of $1,686.42 for 30 years.

That same $400,000 home loan at 7% has a principle and interest payment of $2,661.21 for 30 years.

Huge difference isn't it?

So, pay attention to "The Fed" and what they are doing.  Keep an eye on the website Realtor.com to see which houses are on the market, what they are listed for and what they are selling for.  The List price and the Selling price aren't always the same.  Plus, you can see how long they stay on the market if they sell.

I've attached "The Fed" calendar to this post so you can be aware of when they meet.  Their announcements are usually made the next day.  Fingers crossed they lower the interest rates.

If you are interested in buying or selling, call me, Stewart Goodwin, 804-516-8561.  I'll be happy to answer your questions and guide you through the process of buying, selling or both.  I am a Virginia licensed real estate broker with 20 years of experience.