BATON ROUGE, La (NBC33) — If you're in the market for a new house, now is the time to buy. That's because mortgage interest rates have fallen to a new low, and experts expect that trend to continue.
Rachel Klein never expected to be buying a home at 24, but she says she couldn't pass up the opportunity. "With rates being as good as they are, my monthly note is going to be like $800," she explains. "Whereas I'm spending over a thousand dollars a month in rent."
Experts say the average rate on a 30-year fixed mortgage fell to 4.01% this week. It's a historic low. For instance, three months ago, the 30-year was at 4.6%. People buying homes now would save about $40 a month per every $100,000 borrowed. That totals about $14,000 for every $100,000 borrowed over the life of the 30 year loan.
Say you're buying a $150,000 dollar home. If you bought now, with the interest rates at about 4%, as opposed to when those rates were at 5%, you'd reduce the principal plus interest by almost $100 every month. In a year, that's a saving of almost $1,200. In 30 years, you'd save nearly $36,000.
"We kept seeing [the interest rates] dropping. It's like I remember when interest rates were like 5% and we're locked in at just a little under 4%," Klein says.
Klein's realtor, Janet Anderson, says that's one of the reasons to buy a home now. "That could be all the difference in what it takes to be able to get into that home," she says. "We're starting to see more activity. We're starting to see more people who are like 'hey! Let me go take advantage of this."
It's not just good news for buyers. Homeowners with higher interest rates can refinance. "I would definitely say with the interest rates the way that they are if you have the opportunity to meet with a mortgage person and crunch those numbers to see what could work for you."
It's a step in the right direction for the Baton Rouge housing market, and for people like Klein, who are looking for a place to call home.
"I just got married, and the thought of having my first home with my husband is just so neat. I feel like a grown-up."
The last time long-term rates were lower than they are now was back in 1951. That's when most long-term home loans lasted 20 to 25 years instead of 30.
Want to know more about buying a home right now? Check out Janet Anderson's website at http://www.artofhomeselling.com/