Now Is the Time to Buy a New Home

If you’ve been waiting to buy a new home thinking that the interest rates and new home prices will continue to stay as low as they are, or go even lower, you may miss out on the opportunity to get the best deal before they start going back up.

According to Bloomberg, House prices, after falling for more than five years, are rising again. All the major sales-price indexes show that there have been modest national increases in recent months, even after adjusting for seasonal patterns.

The San Francisco Business Times reports that Luxury home values in the Bay Area and other key California cities are chalking up their biggest gains since the housing boom went bust in the last decade. Bay Area luxury home values soared 6.6 percent in the second quarter, the biggest year-over-year gain since the first quarter of 2006.

Other major cities are seeing similar trends, and Forbes reports that according to CoreLogic’s August MarketPulse Report which provides insight into the current and future health of the U.S. economy with emphasis on housing and mortgage metrics, “While the general U.S. economy continues to struggle to make gains, for the first time since the end of the recession, housing may actually make a significant contribution to economic growth in 2012, a welcome change to affairs for an otherwise struggling economy.”

The cost of buying a new home is not completely dependent on the cost of the home itself but is also determined by the amount and interest rate of the home mortgage. Every percentage point the interest rate goes up could cost a home buyer hundreds of dollars more each month on their mortgage payment, or lower the amount that they can afford to borrow to keep their monthly payment where it needs to be.

For example, say you need to keep your monthly house payment at $1,000 or less. With the interest rate at 3.5%, if you can borrow approximately $220,000, a one percentage point rise to 4.5%, would only allow you to borrow around $177,000 to keep your monthly payment at $1,000/mo. If the interest rate goes up to 5.5%, you would only be able to borrow approximately $159,000. These figures are only approximate, and the amount of a home mortgage will be determined by additional factors such as credit rating, but even a one percentage point rise in the interest rate makes a large difference in the amount of money you can borrow for a set monthly payment.

If you are in the market for a new home in the Fayetteville NC area, please visit the McKee Homes website to view our Fayetteville new homes as well as our Fort Bragg new homes. McKee Homes offers such a great value for your money, you may find that you can buy a brand new home for the same amount or less than a pre-owned home. McKee Homes also works with a dedicated preferred lender team to get you the lowest interest rate new home financing available with no-money-down options for VA and USDA loans.

Monthly Payment

Max Loan at 3.5%

Max Loan at 4.5%

Max Loan at 5.5%

















The data shown in this table is only approximate and is based on 30 yr loan with good credit rating.

Edited and posted by

McKee Homes online marketing manager

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