Edition 3 March 2011
Interest Rates
Interest rates for home mortgages have started their climb back up. Today in the Austin area a new mortgage will be over 5% probably closer to 5.25%. That is still historically low but compared to the 4.5% we have been looking at for a long time it feels high.
So cheap money is fading away and with it purchasing power.
$100k loan
4.5% interest - $506.00 monthly payment of principal and interest
5.25% interest - $552.00 monthly payment of principal and interest
So if $506 is your budget, now all you can borrow is: $91,750
Your purchasing power went down by: $8,250
But this is a lesson for the next time interest rates go down. Strangely the number of homes sold is going up and the average price is also going up.
I’m feeling better about our real estate market!
Check out the website. www.BlackburnRE.com
John Blackburn
Broker, Blackburn Properties
512 431 8428
