We asked two of our financial MVP's Neal Smith of NKS Financial and Danny Ponder of Provident Bank Mortgage for some advice this month! Here is what they had to say...


From Neal Smith of NKS Financial

Freddie Mac has recently stated that they project interest rates to be at least 5% by the end of next year.  If you compare the mortgage payments of a $400,000 home purchased today vs. a home purchase at the same price a year from now, you should expect a $140 savings by buying today.  This estimate is based 20% down and a current interest rate of approximately 4.25% vs 5% next year.   That same house next year would need to be $366,500 for you to receive today’s mortgage payment mentioned above.

The bottom line is rising interest rates could cause home prices to decline by 5-8% next year.  If you are looking to sell our house, I would recommend selling NOW!

From Danny Ponder of Provident Bank Mortgage

The current affordability of homes in the Sacramento area is creating Bay Area buyers to enter the market and telecommute to their jobs.  These buyers typically have the means for large down payments or are cash buyers and want to be in areas that are near down-town and entertainment amenities.  There are many in-fill projects happening as well and it appears that builders’ sentiment is that there is a need for more housing.  Continued job growth will continue in the local medical field and an estimated 4,000 new jobs are projected with the new sports arena.  Lending guidelines are loosening up a bit and we are seeing more buyers who can now be active in the market since the repercussions of the great recession where so many people lost homes to foreclosure.  Current interest rates are still historically low and the general consensus is that we should see rates increasing by the end of the year.

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