According to recent survey data from the National Association of Realtors, purchasing a home remains part of the “American Dream.” Homeownership is still an attractive opportunity for financial security, stability, and investment for you and your family.

If owning a home is a dream of yours, it may be easier to achieve than you might think. Mortgage rates on 30-year fixed mortgages reached a historic low of 2.81% earlier this year, with the current rate hovering around 3%. The rates on 15-year fixed-rate mortgages and adjustable-rate mortgages were also lower than in previous years. This makes it the perfect time for potential homebuyers – especially first-timers – to lock in a low rate before they start rising again, whenever that may be.

The real estate experts at Lakeshore Realty have compiled a list of why every homebuyer should take advantage of these low rates:

Save Money

In the current market, homebuyers can save thousands of dollars over the life of a mortgage loan. For example, you put in an offer for a home with a purchase price of $200,000. If your 30-year fixed mortgage rate was 4%, your monthly payment would be about $955. But if you are locked in with a 3% interest rate, the payment falls to $843 per month. With amortization calculated in, a homeowner will save $30.000 over the life of the loan at a lower rate.  A mortgage calculator can show your savings for several scenarios.

Affordability

Lower interest rates create lower monthly payments, which make purchasing a home more affordable. According to Black Knight, a mortgage software and analytics company, home prices increased by 3.8% last year; the lowest increase in 25 years. Based on this data, it takes 22% of the median household income ($68,400) to buy an average-priced home, which is about $320.000. The long-term average is 25.1%, making now a great time to enter the buyers market.

More Buying Power

With a lower mortgage payment due to lower interest rates, potential homebuyers can qualify for a larger home loan with the added savings. Let’s say you can afford a monthly house payment of $2,000 and put 20% down. If you had a 3% interest rate on a 30-year fixed mortgage, you could purchase a home for about $485,000. But, if your rate was 4%, the purchase price decreases to about $436,000. A 1% difference in interest rate may not seem like a lot, but it can make a huge difference in your potential buying power.

At Lakeshore Realty, we work tirelessly to help our clients achieve their real estate goals. Whether you are looking to buy or sell, the professionals at Lakeshore Realty will be able to help you along your journey. For more insight and advice about buying and selling a home, contact us today at 828-456-4070 or visit our website.