Interest Rates Are on the Rise

Have we finally hit the bottom of the low interest rates? Only time will tell us the answer for sure, but it looks like we probably have. So if you've been sitting on the fence hoping for the rates to go down, it looks like your fence sitting should end. All of us know that the federal government is borrowing money like crazy to deal with the federal budget deficit. That act alone, in the quantities that are being borrowed, has put an upward pressure on interest rates. I talked with David Fountain our local Wells Fargo representative, and he provided the following information for interest rates over the last 120 days.



As you can see by the above spreadsheet, interest rates dipped to their lowest level in years between 30 and 60 days ago. Those rates have risen considerably... 7/8ths of 1% to be exact... in just the last week. From 30 days ago to today, the monthly payment for a $250,000 loan has increased over $116 per month. Another way to look at it is to ask: “How has my buying power been affected by the increase in rates?” That can be determined by looking at the following chart.




As you can see in the last 30 days a person approved for $1,400 a month payment had their buying power reproduced by $21,346. And since buyers are approved on the monthly payment amount, not on the total loan amount, that really equates to a buyer having to look at homes in a much lower price range.

All buyers want to buy when the prices are the lowest and when interest rates are the lowest. The reality is that those people who look into that crystal ball often end up eating glass. Clearly we can see that rates are on the rise and in Durango, the home prices, depending on the exact area you're looking, have stayed quite strong and steady. The average in town Durango home price has actually risen. Don't be the person that regretfully says: “Oh, I wish I would have bought in the spring when interest rates were the lowest. Now I have to buy a less expensive home with fewer features." The fence sitting time is over. As we often say in this business “It is time to pull the trigger."

Team Lorenz would love to help you in your search for Durango Colorado homes for sale. We have two full-time buyer specialists who do nothing but work with buyers. They are experts in your search for Durango Colorado real estate. To take a look at some of the homes that we have for sale click the following link. Durango CO homes for sale.