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Rates are on the RISE

Monday, February 14, 2022   /   by Sarah McGarry

Rates are on the RISE

Over the past couple of week, mortgage interest rates have been on the rise. This can hurt buying power but hasn't seemed to cause a shift in the market. If anything, it's doing just the opposite. Now is the time to buy, more than EVER. Rates are projected to continue to climb. With the historical lows behind us, it could be awhile (if ever) that we see rates where they are currently. Using the 1% = 10% rule, explained below, we can express that urgency. 

1% = 10% Rule: 

This rule can be extremely useful to be aware of and is a fairly simple concept.

The 1% = 10% Rules says that for every 1% change in interest rate, your purchase power is affected by 10%.  Based on the example, a 1% interest rate increase affects the purchase power by over $21,000.  Thats a BIG deal in a low inventory market.  Earlier this week, interest rates were still well under 4%.  What is your interest rate risk now?  What is your purchase power now?  Is it really worth holding off until 2020 and an election year to purchase?  Talk with a local lender for current interest rates and accurate calculations.

Historical-30-Year-Mortgage-Rates-Chart-1975-2022.pngChart provided by themortgagereports

The average property appreciation in El Paso County last year was 18%. An 18% return on investment is fantastic! 

Berkshire Hathaway HomeServices Synergy Realty Group - McGarry Home Team
Sarah McGarry
5225 N. Academy Blvd. #301
Colorado Springs, CO 80918

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