We are going to see changes in the housing market in 2024. To determine which option will save you money, start weighing your home purchasing power against mortgage rates for Metro Detroit.
Unlocking Your Home Purchasing Power is Closer than You Think
Mortgage rates play a big part in your home-buying journey in Metro Detroit. They decide how much you pay every month for your new home. When mortgage rates go up or down, what you can afford changes, too. Knowing how mortgage rates affect your monthly costs and overall budget is critical. While we haven’t seen home prices dip, the landscape is steady, thanks to a tight market. We’re not witnessing the skyrocketing prices of the Unicorn Years, yet a decrease in mortgage rates could spark a buying frenzy amid the ongoing shortage of homes in Metro Detroit.
This means prices could rise again. How much? It hinges on demand, recalling the surge between 2020 and early 2021. Now’s the moment to crunch some numbers and pinpoint the optimal time to make your move. Good news: As of June, we are seeing a cooling economy. The inflation reports are down, and unemployment rates are up.
Step #1 ~ Track Daily Mortgage Rates
The question of when mortgage rates will drop is complex. Various factors contribute to the current volatile mortgage rate environment. First, you need to understand Wall Street determines mortgage rates through bonds and securities. Start with Today’s Mortgage Rates: What’s Driving the Change and learn how to predict mortgage rates like a pro.
Step #2 ~ Visit Mortgage Daily News and Compare Rates
When I show you mortgage rate trends, they represent base rates. You must now calculate your FICO Score, Down Payment, and points lenders charge to lower the rate. Visit Mortgage Daily News and scroll down to the compare calculator. Change your options, then update lenders. This is a great learning tool for comparing mortgage rates from several lenders. You’ll find rates as low as 6% and some higher than the base rate.
Step #3 ~ Buyer Purchasing Power Principal and Interest Only (P & I)
Once you determine your monthly payment ⤵️, you must add your Payment Mortgage Insurance (PMI) if you put less than 20% down + your homeowner insurance + Property taxes = your monthly payment.
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Calculating Your Taxes
This is the biggie: your property taxes in Metro Detroit. Don’t use the posted taxes from the multiple listing service because your taxes will increase based on what you paid for the house. Tax payments are calculated on June 1 and November 1, so be prepared for your payment to go up. Contact the municipality to determine their millage rates for different school districts or visit the state millage rates website. Take the home sale price and divide by 2 = X. Next, take the millage rate, multiply by X, and divide by 12; that will be your monthly tax payment.
Your Home Buying Budget
Your formula Mortgage payment P & I from purchasing power graph⤴️ + PMI (if less than 20% down) + Home Owner’s Insurance (divide by 12 for a monthly fee) + Monthly Taxes ⤴️ = your monthly budget. Work through the process in two ways. Lower mortgage rates, higher home prices, and higher mortgage rates lower home prices. This is a great way to prepare your budget before looking for homes. With so many buyers sitting on the fence waiting for mortgage rates to drop and a low supply of homes for sale, common sense tells me home prices will increase based on Supply and Demand. When negotiating with lenders, refinance fees should also be negotiated.
Get Help from Reliable Experts To Understand Your Budget and Plan Ahead
When buying a home in Metro Detroit, guidance from a local real estate agent and a trusted lender is essential. They can help you explore different mortgage options, understand what causes mortgage rates to go up or down, and understand how those changes impact you.
By combining the numbers and the latest data and adjusting your strategy based on today’s rates, you’ll be better prepared to buy a home.
Last Step Before You Start Looking for Homes
Now that you have an idea of your monthly budget. I recommend finding out what homes are selling for. That will help you narrow down your needs versus your wants. You may rethink your plan once you see what all those bells and whistles will cost you.
Macomb County Sold Home by City
Oakland County Sold Homes by City
Schedule a Buyer’s Consultation
Boy, that’s a lot to pack in.🤩 Ready to explore the market and find your perfect home? Schedule a Zoom call with me, and we’ll review the sold data, understand your purchasing power and property taxes, and answer your questions and concerns. I’ll share my screen to give you a clear view of the market insights and help you make informed decisions.
Bottom Line
If you’re looking to buy a home in Metro Detroit, you should know the recent downward trend in mortgage rates is good news for your move. Let’s connect and plan your next steps.
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