What the 'Fear Factor' Means for Your Home Purchase
NEW YORK (BankingMyWay) -- Even as 30-year fixed mortgage rates rise, Americans want to buy new homes anyway -- and that's pushing up the value of homes across the country.
The 30-year fixed mortgage rate shot up more than 200 basis points last week, from 4.51% to 4.72%, according to the BankingMyWay Weekly Mortgage Rate Tracker. One-year, three-year and five-year adjustable-rate mortgages rose sharply as well.
But that's not stopping homebuyers from landing new properties.
That after the National Association of Realtors reports a big jump in existing-home sales, which rose 6.5% in July. All told, the rate of new home purchases was up 17.5% from July 2012 to July 2013.It's also the 25th straight month of rising monthly U.S. home sales, the NAR reports. BankingMyWay Mortgage Calculator, the total interest on a $200,000 loan at a rate of 4.5% would be $164,813.00 over 30 years. But a 5% rate would drive that total interest rate cost up more than $186,50 over the same period, adding an extra $22,000 or so to the purchase of the home. Smart buyers know this and are jumping in now before rates can go any higher, as the recent trend suggests.
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