A snippet of an article from CNN’s Money section:
NEW YORK (CNNMoney.com) — Mortgage rates continued to decline this week, plunging to the lowest level in decades, according to surveys from Freddie Mac and Bankrate.
Freddie Mac’s weekly report said the 30-year fixed rate slipped to 4.44% for the week ended Thursday, the lowest since the government-backed lender began tracking the rate in 1971. Last week’s rates stood at 4.49%, and a year ago it was at 5.29%.
Wow! Some of our readers are doubtless old enough (like us) to remember the early 1980s rates of 14%, 16% and higher.
Here’s a nifty chart from The New York Times that gives a great visual of the history of home mortgage interest rates going all the way back to 1900!
What’s it mean to you, the home buyer?
If you’re buying, a 1-point drop in interest rates means you can buy more house. A lot more. Call or email us to help you figure out the numbers for your own situation. But here’s an example.
Let’s say you’re financing $150,000. . .
| Amount Financed = $150,000 |
4.5%
Mortg Rate |
5.5%
Mortg Rate |
6.5%
Mortg Rate |
Monthly Payment
(principal & interest only) |
$760 |
$852 |
$948 |
Let’s work it the other way.
Let’s say you’re trying to keep your payment at about $950 per month, for principal and interest (not including property taxes, HOA fees, etc).
| Desired Payment = $950/month |
Interest Rates are 4.50% |
Interest Rates are 5.50% |
Interest Rates are 6.50% |
| How much home can you buy for desired payment? |
$187,000 |
$167,000 |
$150,000 |
Holy cow! If rates drop from 6.50% to 4.50%, the homebuyer who’s aiming for a monthly mortgage payment of $950 can suddenly buy $37,000 more house for the same monthly payment.
Given that mortgage rates change almost daily, but home prices change much more slowly, home buyers do themselves a favor if they watch long-term mortgage trends instead of focusing only on home prices.
What does this mean for home sellers?
If you’ve been considering a price drop lately, you might be able to put it off for a few more weeks. The rate drop means potential buyers’ money goes further. Of course whether you need a price drop or not depends on your situation. Check with your Realtor. And ask yourself why you didn’t hire Chris & Heather, The Phoenix Agents at Thompson’s Realty in the first place. We’re awesome and here’s some of our clients who say so.
Heather Barr is a Realtor. She's a chow hound, a gym rat, and a political junkie and a happy workaholic.
Tagged as:
Interest Rates
This is a reprint of an earlier post.
Federal Fair Housing law prohibits discrimination in the sale, rental or financing of housing because of:
- Race or Color
- National Origin (the country in which one was born)
- Religion
- Sex
- Familial Status (whether one has children or not, whether married or not)
- Handicap/Disability
Some states include additional groups, such as “sexual orientation”. You can check your state’s protected classes here. Fair Housing Law as it stands now is an amalgamation of various laws enacted during the late 1960s and mid 1970s.**
Notice that age is *not* on the list. Metro Phoenix has lots and lots of “active adult” communities which restrict the minimum age of their residents. As an aside, we used to call these retirement communities. Apparently we don’t retire anymore, we just get active.
The most common question I hear from buyers is “Is this a good neighborhood?”
What they’re really asking about of course, is either the crime rate or the type of people living in the area. Fair Housing law prevents me, your Realtor from telling you about the neighbors if that conversation might stray into discussing one of the protected classes. Most Realtors just don’t discuss the topic at all, for fear of violating Fair Housing law. It’s rumored that the FHA sends testers out to work with Realtors, secretly checking for violations of the law. True? I don’t know but I don’t want to find out.
Besides, my idea of “nice” or “good” neighbors might vary wildly from yours. Some people find the idea of living near folks of another race, religion or sexual orientation is a big problem. Most don’t care. My best advice to buyers in this scenario is to drive through and walk through the neighborhood yourself, at different times of the day, to see what you see. Talk to your potential new neighbors. Visit a grocery store, or a park in the area. See if you feel comfortable in the area.
As for crime, I can and will point you towards websites that list crime statistics, usually by ZIP code. I usually beg off answering the ‘crime’ question, because one person’s ’safe neighborhood’ is another person’s ‘fringe neighborhood’ is another person’s ‘hood.’
Housing not covered by the Federal Fair Housing law
-
Single family housing not sold through a broker
-
Owner-occupied housing of no more than 4 units (you own a duplex & rent the other side)
-
Housing operated by private clubs which limit membership (co-op’s)
The first bullet above applies to For Sale By Owner homes. Selling it yourself? Discriminate all you want. I’m kidding of course, but the government can’t interfere if you want to sell your home yourself but intend to refuse to sell it to Australians born in New Zealand who practice the B’hai faith.
The second & third bullet points don’t apply much in metro Phoenix. But there are some duplexes and fourplexes in our Valley, and even a few co-op’s down in South Scottsdale. No one can force you to rent the other side of your duplex to a family with 17 kids if you abhor children. Similarly, the co-op board reviews applicants who want to purchase a unit, and they make their own rules about who can move in.
For more information, see the Federal Fair Housing booklet and information about updates to Fair Housing law. Think you’ve been discriminated against in housing? The National Fair Housing Advocate Online can help. Note that all these resources apply to housing you buy. For help with rental situations, see the Arizona Residential Landlord Tenant Act.
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**As a side note, I do actually remember overhearing a mortgage banker telling my just-divorced Mother in the early 1970s that they couldn’t possibly transfer the mortgage on our home from “Mr. and Mrs.” to just “Ms.” because. . . well, she was a woman. . . don’t you see. . . she could get pregnant, and then how would she pay the mortgage? When you think about it, it’s really astounding that was only 40 years ago.
Heather Barr is a Realtor. She's a chow hound, a gym rat, and a political junkie and a happy workaholic.
Tagged as:
Real Estate Contracts
