By Angela Gonzales | Phoenix Business Journal
It’s no secret home prices are on the rise in metro Phoenix, but an upward tick in mortgage rates could close the window on a good deal for home shoppers.
Despite rising home costs in the Valley, homebuyers have been taking advantage of record low mortgage interest rates that have helped keep their monthly mortgage payments down.
But mortgage rates have risen about 25 basis points, or one-quarter of one percent, within the past 30 days, said Kevin Kosan, senior vice president of the Home Builder Finance Group for First International Bank & Trust in Scottsdale.
For now, he said, the window is still open.
“As you know, the big jump in resale prices due to a very constrained supply, has helped to push buyers to new homes, and new home subdivisions have multiple floor plans with a range of pricing,” Kosan said. “With an uptick in pricing and/or interest rates, a new homebuyer can alter their expectations for some upgrades in a new home or even select a smaller new home at a lower price.”
At today’s average mortgage rate of $2.68% and typical home value of $382,359, the monthly payment is about $1,063, presuming a 30-year fixed mortgage and 20% down payment, according to a new analysis by Zillow Group Inc.
But if home values rise by 8% and interest rates climb to 3%, the monthly cost of that same house would be $1,196 a month. At 12% home value growth, the monthly payment would jump to $1,240, according to the Zillow research.
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