The past few years of historically low interest rates—between 2 and 4%—have kept peoples’ monthly payments low by usually several hundred dollars. Consumer price index showed prices inflated 8.5% in March from the same time last year. The biggest increase since 1981. With the hope of inflation has peaked, the producer price index on Wednesday, April 13, rose 11.2%, the biggest gain on record.
The average 30-year fixed rates are now over 5%. Using a $500,000 loan, the difference of monthly payment is $300 for 1% increase in rate. The higher monthly payment has created some budget concerns for many buyers. Adding inflation costs to this mix, this has become extremely rough for first time homebuyers. More homebuyers start looking into areas with lower priced homes.
If you have been pre-approved recently, I will be happy to review your pre-approval letter to make sure you are still qualified. Contact me today at 925-216-3618.
