Interest Rate Increase December 2015
As you have probably heard (especially if you follow my Facebook real estate page and/or my Twitter feed – @KayeSwain ), the Federal Reserve moved forward with an interest rate increase in December, 2015.
Not by much, but it was a start. If you're wondering how much of a difference an interest rate increase can make, take a look at this infographic!
Interest Rate Impacts on Home Buying
When we bought our first home in Roseville about 20 years ago, we were able to assume an adjustable rate loan that was at a phenomenally low rate for then. It started at 4%. When we sold it about 9 years later, it was up to the max of 9%. (Yes, I now HATE adjustable rate loans. 🙂 ). If I had bought my house at the interest rate I paid when I sold it, I would have had to look at a much smaller home!
Right now, with interest rates still so low, it is definitely a great time to buy a house – whether it's your first or your tenth. That way you can lock in a mortgage at the great rates we currently have, even after the interest rate increase. As I mentioned, it was only a tiny adjustment – a quarter per cent. This is true for all home buyers but especially those of you who have never bought a home before and have no real estate equity.
This video from Sacramento news station KCRA has encouraging news that Janet Yellen is planning to make future increases slowly.
But it also quotes a local financial adviser who wisely points out that this is a good wake-up call for all to make sure our money matters are well arranged.
Interest Rates Impact for Home Buyers
What does this mean for buyers? Right now, probably not much. Most of the impact from the interest rate increase seems to be in the area of home re-fi's and credit card interest rates. For the long term, it could indicate future increases. If you are thinking of buying a home – whether your first home, or downsizing due to retirement, or upsizing due to a growing family – multigenerational issues – etc., this is still a great time to do it. As the infographic at the top reminds us and I wrote earlier, you can purchase twice as big a home now than you would have been able to ten or so years ago!
Interest Rates Impact for Home Sellers
How about sellers? Does this matter to you? Absolutely! Right now, we are short on homes for sale which has led to many multiple offers. Values in the area have increased. Your home may well be worth more than you think! And with interest rates still historically low, buyers are often highly motivated leading to happy escrow endings.
Home Values in Sacramento and Roseville CA
Are you wondering how our own area of Sacramento and Roseville have done over the last year?
As you can see, both cities are definitely following the general state increase in real estate values! Great news for this whole area! Of course, prices can vary widely by zip code in each of these cities. If you'd like a pdf report of one or more specific zip codes along with other updates, just email me at Kaye@KayeSwain.com and list the zip code(s) you are interested in. (And if you'd like to find out info about how the interest rate increase will impact a mortgage, I have a great lender to recommend.) 🙂
One more very important thing! Have a great week! 🙂 🙂 🙂
P.S. If you'd like a free analysis of your home's value, just give me a call at 916-768-0127 or email me at Kaye@KayeSwain.com. Or for a rough estimate, just click here.
P.P.S. Want to search for homes for sale in Roseville? Or the greater Sacramento area? The top photo is homes available in the local Roseville area. The bottom is Sacramento and Placer County. Just click either picture below and you'll find lots of options including starting a whole new search. 🙂
Sacramento – Placer Counties