Advantage Home Plus Blog

With all the talks of mortgage rates and changes to our current housing climate, even small changes can have a big impact.

Now that we have seen a decrease to mortgage rates, builders and real estate agents are saying they see more home shoppers hit the market. With Advantage Home Plus, your employee home ownership program, we see this as a urgent call to our potential home buyers saying "Hurry", home costs are traditionally lowest at the start of a year and the Federal Reserve has already signaled that interest hikes are coming for 2019.

Many potential home buyers from last year realized that they couldn't afford much home or the monthly mortgage amount, in part to buyers becoming lackadaisical about mortgage rates, always thinking they will stay low, assumption can be an enemy in the housing market.

We did our digging and found Paige Shipp of housing analyst MetroStudy Inc. said "The buyers that said interest rates are too high and we can't do this are probably regretting that they didn't get approved for a loan and keep hunting houses, rates are lower now. If people want to buy a home in the spring, they need to stay on top of where mortgage rates are".

Based on the recent decrease in mortgage rates nationwide, it has amplified the amount of home loan applications received. Don't just take it from us, Frank Nothaft, Chief Economist for CoreLogic said, "We have seen a boost in loan application volume, both for purchase and for refinance, fixed-rate mortgage rates are down about a half percentage point from November 2018"

"That is an important gain in affordability," he said. "For example, to buy a $300,000 home with 20 percent down payment, the monthly principal and interest payment for a $240,000 30-year fixed-rate loan has dropped from $1,280 to $1,209, a monthly savings of $71.  That makes a big difference in a family's budget." On the flip side, when mortgage rates increase again, an extra .5% in rate will cost that family an additional $71 a month for the same home. 

While there are other factors to consider, we still expect home loan costs to move higher this year.  With this knowledge in hand, if you’re a perspective buyer or if you’re ready to buy a home now, it's better to act sooner then later. Don't dawdle, no one expects the recent reduction in home mortgage rates to last long.

If you are one of those employees who are thinking about purchasing a home this year, talking with your benefits advisor about your employee home ownership program is always a great place to start.  Your non-commissioned benefits advisor can share helpful information about your benefits and savings and help to get all of your mortgage and real estate questions answered.