Interest rates have increased from the beginning of the year. According to many experts, it will likely go up more this year. This is critical information for those who plan to find real estate this year. Predicted interest rate changes in 2015 and tips for MA home buyers is discussed further in this article.

Why Predicted Interest Rate Changes In 2015 Are Important

The calculation of your recurring cost is based on the interest rate. An increase in interest rates mean that you may be approved for less and/or pay much more for the same house. Even an incremental change will create a difference. If you are looking for a house at the max approval amount, an incremental rate increase may really impact you.

Here is an illustration of how pre-approvals may move with interest rates. This is assuming a set down payment percent and keeping the mortgage payment unchanged.

Interest Rate Max Price
4.00% $449,773
4.25% $436,494
4.50% $423,791
4.75% $411,636
5.00% $400,000
5.25% $388,858
5.50% $378,184
5.75% $367,955
6.00% $358,149

Other Factors to Consider

Other than interest rates, fluctuations in home prices may also alter your buying plans. In many markets, real estate prices have risen progressively for a year or so. Many areas are getting multiple offers and sale prices above asking. A lot of this was created by low listing volume and high buyer demand.

Tips For MA Home Buyers When Contemplating Buying Now or Later

Upward interest rates and home values both have a negative impact on buyers. Buyers will realize that they may afford less and less over time. The quality of real estate at a specific price point will be less optimistic too. All things considered, it is probably best to act now rather than waiting.

What is Anticipated This Spring

Spring is historically the most active season for the housing market. There should be more inventory to meet the pent up demand, but expect competition. Buyers opting to act may benefit from reasonable interest rates. Expected improvements in house values will bring an opportunity to grow equity faster than typical.