Interest rates for a 30-year fixed rate mortgage are currently at 3.96%, which is still near record lows in comparison to recent history! This is According to Freddie Mac’s latest Primary Mortgage Market Survey.

The interest rate you secure when buying a home not only greatly impacts your monthly housing costs, but also impacts your purchasing power. Considering current Northern VA home prices, purchase power should be taken into consideration.

Purchasing power is the amount of home you can afford to buy for the budget you have available to spend. As rates increase, the price of the house you can afford will decrease.

The chart below shows what impact rising interest rates would have if you planned to purchase a home within the national median price range, and planned to keep your principal and interest payments between $1,850-$1,900 a month.

With each quarter of a percent increase in interest rate, the value of the home you can afford decreases by 2.5% (in this example, $10,000). Experts predict that mortgage rates will be closer to 5% by this time next year. When deciding to buy a home in Northern VA, keep in mind the high impact of low interest rates on your purchasing power.

Act now to get the most house for your hard-earned money.