{"id":706,"date":"2013-04-24T19:59:50","date_gmt":"2013-04-24T19:59:50","guid":{"rendered":"http:\/\/lexingtonhomeschicago.wordpress.com\/?p=706"},"modified":"2013-04-24T19:59:50","modified_gmt":"2013-04-24T19:59:50","slug":"the-difference-when-interest-rates-start-to-rise","status":"publish","type":"post","link":"https:\/\/www.lexingtonchicago.com\/about\/blog\/the-difference-when-interest-rates-start-to-rise\/","title":{"rendered":"The \u201cDifference\u201d When Interest Rates Start to Rise"},"content":{"rendered":"

\"Picture<\/a>December 19, 1980. Prime Rate: 21.05%<\/p>\n

The above statistic is shocking but true.\u00a0 Interest rates have been very low because of our country’s economic struggles over the last 5+ years.\u00a0 As a veteran of the New Home Sales Industry, I believe that today\u2019s buyers have become complacent and na\u00efve about how easy and affordable it truly is to buy a new home.\u00a0 The 3.5% \u2013 4.0% interest rates that we are now enjoying will not last forever.\u00a0 As the housing market improves (and it is showing signs that it is), the interest rates will start to go up again.<\/p>\n

When I first got into the business of selling new homes in the mid 1980s (at Lexington Homes), people were so excited that the interest rate had come down under 10%.\u00a0 Most of my career the rates were in the 7 – 8% range.\u00a0 Today\u2019s rates are \u00a03.5 – 3.75%!\u00a0 This is incredible!\u00a0 Especially with people renting at top dollar right now.\u00a0 So what is the real cost of waiting?<\/p>\n

When I meet with a young person in their 20\u2019s or 30\u2019s who says to me that they might wait to buy, I think \u201cwait for what?\u201d \u00a0It is highly doubtful that these interest rates will be this good next year.\u00a0 Here is an example: if you are considering a 280,000 mortgage for a new home, the Principle and Interest would be at 3.5% which equates to 1257.00\/month.\u00a0 When interest rates go up (and they are going to) say to 4.5%, that same payment will be $1419.00.\u00a0 If they go up to a \u201cstill reasonable rate\u201d of 5.5%, the payment would be $1590.00.\u00a0 The difference of 2% points is $333.00\/month!<\/p>\n

When I talk to a \u201cmore experienced\u201d person, say in their 50\u2019s, they sometimes tell me that they want to wait for their home to get back to the value it once was.\u00a0 I tell them if their house is less, then the one they want to buy instead is less, too. Also, will their home increase enough in value to make up for what the interest rates may be at that time? Builders have kept their prices at \u201crock bottom\u201d to help encourage those who might be waiting.<\/p>\n

For today\u2019s New Home Buyer, the worst thing to happen would be raising prices and raising interest rates.\u00a0 I believe we are going to see both in the next year.\u00a0 This makes right now the best time to buy a new home!<\/p>\n

At Lexington Village at Rob Roy<\/a>, we are down to the last 3 available homes.\u00a0 Come see this beautiful community of 15 Row Homes in Prospect Heights soon!<\/p>\n","protected":false},"excerpt":{"rendered":"

December 19, 1980. Prime Rate: 21.05% The above statistic is…<\/p>\n","protected":false},"author":1,"featured_media":711,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[139,140,166,199,262],"_links":{"self":[{"href":"https:\/\/www.lexingtonchicago.com\/about\/blog\/wp-json\/wp\/v2\/posts\/706"}],"collection":[{"href":"https:\/\/www.lexingtonchicago.com\/about\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lexingtonchicago.com\/about\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lexingtonchicago.com\/about\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lexingtonchicago.com\/about\/blog\/wp-json\/wp\/v2\/comments?post=706"}],"version-history":[{"count":0,"href":"https:\/\/www.lexingtonchicago.com\/about\/blog\/wp-json\/wp\/v2\/posts\/706\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.lexingtonchicago.com\/about\/blog\/wp-json\/wp\/v2\/media\/711"}],"wp:attachment":[{"href":"https:\/\/www.lexingtonchicago.com\/about\/blog\/wp-json\/wp\/v2\/media?parent=706"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lexingtonchicago.com\/about\/blog\/wp-json\/wp\/v2\/categories?post=706"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lexingtonchicago.com\/about\/blog\/wp-json\/wp\/v2\/tags?post=706"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}