Mortgage rates inched up again for the sixth week in a row, increasing the monthly financial burden again for new buyers in the housing market.
The rates for a standard 30-year fixed mortgage rose from 6.64 percent to 6.67 percent, according to a weekly national survey of large lenders released Thursday by Bankrate.com. This time last year, the rate was 5.81 percent.
The rising rates — although only fractions of a percentage point — are affecting the bottom line for buyers in the local market. The assessments on which property taxes are based are rising as well.
“It is going to cost you more to own today than it did a year ago,” said Rick Eul, assistant vice president of Bank of America and chairman of the Real Estate Finance Forum, a Northern Virginia Association of Realtors committee. But many counties in the region have dropped real estate tax rates to help offset rising assessments and some of the costs, he said.
“What you’re paying slightly more in interest rates, you’re paying less in property taxes,” he said. “It’s a balancing out. But it’s still expensive to live here. The average family [with an] income of $83,000 is going to find it hard to find housing.”
For example, the median home price in Northern Virginia was $477,000 in March. With a 30-year fixed mortgage, a homeowner would pay $3,489 per month, which also factors in a property tax of $1 per $100 of assessed value and $75 homeowner’s insurance, said Eul. This time last year, the monthly payment was $3,323, which figures in $70 extra per month for property taxes.
“It’s clear that rising interest rates do weaken sales,” said Jill Landsman, a spokeswoman for the Northern Virginia Association of Realtors, which is why Realtors and financial advisers are now suggesting more creative ways of financing.
Eul said that 10-year interest-only loans are now the most popular form of financing, not the standard 30-year fixed. With the current interest rate and average property taxes, homeowners would pay $3,092 — a difference of $397 per month.
No price like home
Median home prices in the
Washington region:
» Northern Virginia: $477,000
» Montgomery County: $465,000
» Washington, D.C.: $462,000
» Prince George’s County: $335,000
Property tax rates:
» Fairfax County: 89 cents per $100 of assessed value (down from $1 last year)
» Alexandria: 81.5 cents per $100 (down from 91.5 cents)
» Arlington: 81.8 cents per $100 (down from 87.8 cents)
» Prince William County: 75 cents per $100
» Prince George’s County: $1.451 per $100
» Washington, D.C.: 92 cents per $100
