How interest rate hike can impact Boston condos for sale
Hikes in mortgage interest rates could mean less home for the same mortgage payment for Boston downtown condo buyers.
Interest rates in the U.S. continue to rise. And if mortgage interest rates climb to 5 percent, as some forecasters expect, the price of a Boston condo for sale that a typical buyer in Boston could reasonably afford would fall by 9 percent, according to a new analysis from real estate website Zillow.
Zillow bases its estimates on a monthly mortgage payment representing 30 percent of a home-buyer’s salary.
The Mortgage Bankers Association predicts the interest rate for the average 30-year, fixed-rate mortgage will increase to 5 percent during the second half of 2019, and to 5.1 percent in the following two years. This means Zillow’s forecast regarding the effects of a 5 percent interest rate will almost certainly materialize in 2019.
However, it’s “important to remember that rates on a typical mortgage remain very low by historic standards — especially given the type of strong economic growth we’ve been experiencing,” Aaron
Recent hikes in mortgage interest rates have deterred some would-be buyers; surpassing the 5 percent mark likely would further dampen the enthusiasm of some potential homeowners.
If a 5 percent mortgage rate becomes a reality, “many homebuyers in 2019 will need to reset their price points, with some making concessions about where they’re willing to live or how much space they want,” Zillow says. “Buyers being pushed toward less expensive segments of the market where inventory is also the tightest could, in turn, push prices more quickly upward, making those homes less affordable.”
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Over the course of 20 years in the Boston downtown real estate market, John represented and sold numerous, condominiums, investment and development properties in Greater Boston and in the surrounding suburbs
In addition to representing Boston condo buyers and sellers, John is currently one of the most recognized Boston condo blog writers regarding Boston condominiums and residential real estate markets. John's insights and observations about the Boston condo market have been seen in a wide variety of the most established local & national media outlets including; Banker and Tradesman, Boston Magazine The Boston Globe, The Boston Herald and NewsWeek and Fortune magazine, among others.
For over 24 years, John Ford, of Ford Realty Inc., has been actively involved in the real estate industry. He started his career in commercial real estate with a national firm Spaulding & Slye and quickly realized that he had a passion for residential properties. In 1999, John entered the residential real estate market, and in 2000 John Started his own firm Ford Realty Inc. As a broker, his clients have come to love his fun, vivacious, and friendly attitude. He prides himself on bringing honesty and integrity to the entire home buying and selling process. In addition to helping buyers and sellers, he also works with rental clients. Whether you’re looking to purchase a new Boston condo or rent an apartment, you’ll quickly learn why John has a 97% closing rate.
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John Ford and his staff can be reached at 617-595-3712 or 617-720-5454. Please feel free to stop by John's Boston Beacon Hill office located at 137 Charles Street.
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