How Changing Mortgage Rates Can Affect You

How Changing Mortgage Rates Can Affect You

The 30-year fixed mortgage rate has been bouncing between 6% and 7% this year. If you’ve been on the fence about whether to buy a home or not, it’s helpful to know exactly how a 1%, or even a 0.5%, mortgage rate shift affects your purchasing power.

The chart below helps show the general relationship between mortgage rates and a typical monthly mortgage payment:

Even a 0.5% change can have a big impact on your monthly payment. And since rates have been moving between 6% and 7% for a while now, you can see how it impacts your purchasing power as rates go down.

What This Means for You

You may be tempted to put your homebuying plans on hold in hopes that rates will fall. But that can be risky. No one knows for sure where rates will go from here, and trying to time them for your benefit is tough. Lisa Sturtevant, Housing Economist at Bright MLS, explains:

“It is typically a fool’s errand for a homebuyer to try to time rates in this market . . . But volatility in mortgage rates right now can have a real impact on buyers’ monthly payments.”

That’s why it’s critical to lean on your expert real estate advisors to explore your mortgage options, understand what impacts mortgage rates, and plan your homebuying budget around today’s volatility. They’ll also be able to offer advice tailored to your specific situation and goals, so you have what you need to make an informed decision.

Bottom Line

Your ability to buy a home could be impacted by changing mortgage rates. If you’re thinking about making a move, let’s connect so you have a strong plan in place.

Is It Really Better To Rent Than To Own a Home Right Now in Simi Valley?

Is It Really Better To Rent Than To Own a Home Right Now? | MyKCM

Is It Really Better To Rent Than To Own a Home Right Now IN SIMI VALLEY?

You may have seen reports in the news recently saying it’s better to rent right now than it is to own your home. But before you let that impact your decisions, you should understand what these claims are based on.

A lot of the time, these reports are assuming things that aren’t realistic for the average household. For example, the methodology behind one of those reports says that renting is the smarter financial option because of the opportunity to invest money elsewhere. It assumes renters take the money they’d spend on costs tied to buying a home and put it in an investment portfolio.

But here’s the thing – most people who rent aren’t making those investments. Ken Johnson, Co-Author of the BH&J National Price-to-Rent Index, explains:

“One of the difficulties with the rent and reinvest model is many people . . . simply rent and spend the difference. . . . That’s wealth destroying.”

The reason homeownership is one of the best investments you can make is the wealth it helps you build. That’s why there’s a significant difference between the net worth of the average homeowner and the average renter (see graph below):

So, before you renew your rental agreement, think about the opportunity to build wealth that homeownership provides.

Bottom Line

If you’re unsure whether to continue renting or to buy a home, let’s connect to help you make the best decision.