Contributed by Stuart Sauders, Loan Officer, Bank South
As we head into the final months of 2017 the Atlanta housing market has continued to maintain a solid pace of sales and several positive factors are contributing to this state of the market. First, from an interest rate standpoint we have seen rates drop back down (for the first time this year) to the level we saw them at the time of the presidential election in January. Current rates are the lowest they have been in the past six months. Geopolitical tensions and possibility of a government shutdown pose risks to the economy, yet it has shown growth approaching 2% on an annualized basis. Second, home prices have continued to appreciate, and the Case-Schiller index reports that growth year-over-year from June 2016 to June 2017 reflected a 5.8% increase in average sales prices. This means that a home priced at $400,000 now will likely be selling for $423,000 next year at this time, assuming the trend lines from the last three years hold. Third, a unique opportunity exists for you to go ahead and secure your mortgage interest rate for up to half of a year, with no upfront cost for locking the rate.
To explain further, if you wish to purchase a home that is not yet complete, once you are within six months of closing, it’s possible to lock in your interest rate so that you know what your house payment will be and you will not be exposed to any rate increases going forward. Beyond this, if rates happen to drop after you did the extended six-month rate lock, during the final two months prior to your closing date your rate can be lowered, one time, at no cost to you. If rates go up, you’re protected because you already locked in. If rates fall, you’re protected because you can float down to the lower rate. It’s the best of both worlds and takes some of the uncertainty out of your new home purchase. There is no upfront cost to do a six-month rate lock and no cost to exercise the one-time float down option.
If the opportunity, available here as we track into the latter stages of 2017, of taking advantage of today’s sales prices and today’s interest rates feels like the right thing and the right timing for you and your family, it would be our pleasure to serve you.