2019 was expected to be the year of rising interest rates. Really, how long could this low interest rate period last?
Contrary to expectations, 2019 saw interest rates fall by over 1%. This is great news for homebuyers and homeowners, because lower interest rates lower monthly payments for borrowers.
How do homeowners benefit?
Refinance
If you own your home and have had your mortgage for a couple of years or more, it may make sense to refinance to a lower rate. The lower payment will easy your monthly cash flow, and lower the overall amount of interest you will bay over the life of your mortgage.
Downsize or Expand
Maybe you already own a home, but you’ve outgrown it, or it’s become too much for you to manage. Whether you are an empty nester or an expanding family, 2019 and low mortgage rates likely helped your grow your equity but increasing your home’s value. You can sell your home, cash in the equity, and apply it to a new home, while also taking advantage of the additional buying power the lower interest rates offer. It’s a win-win!
Buy Your First Home
There are lots of benefits of owning your own home. You are paying your own mortgage, instead of someone else’s. As you build equity in your home, it’s like an automatic savings account that grows as you pay down the mortgage and as the home increases in value. The low interest rate environment makes it easier than ever to make homeownership a reality.
2019 Was Great for Homeowners
At the end of 2018, mortgage rates were 4.63%. Now they are well below 4%. So if you waited, the patience worked in your favor. Lower interest rates with increasing wages have improved the market significantly, for buyers and sellers. However, we don’t know how long this low interest rate period will last. Interest rates are expected to remain low for at least the first part of 2020, but inflation pressures could cause rates to rise slightly in the latter part of the year.
Now is the time to lock in a great rate, and make your move.
The chart below shows what a difference a year makes (and what a difference interest rates make) to your monthly payment, based on average interest rates. Waiting another year could be a gamble.
We are here to help! Whether you are looking to buy or sell a home in Northern Virginia, we are always here to help with all your real estate needs! If you are unsure of your home’s value or if you are thinking about buying or selling, contact Jason at 703-298-7037 or Jason@JasonAndBonnie.com.
