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How Low-Interest Rates Affect Property Values in Greenwich

If you’re thinking of buying a home, now is the time in Greenwich, CT!

Here’s why: Increased affordability for buyers. Low-interest rates offer real savings.

Interest rates for mortgages are at a two-year low right now. Currently, the 30-year fixed-rate mortgage is averaging 3.82%, which is the lowest point it’s hit since September 2017, according to Freddie Mac. With more homeowners eager to put their properties on the market, inventory has gone up in Greenwich, CT.

This has translated into more options and more negotiating power for home buyers.

If you are in the market to buy there has never been a better time in Greenwich, CT.

Low-interest rates increase affordability for home buyers

With lower interest rates, home buyers are going to be able to afford a more expensive home in the Greenwich, CT area.

Let’s walk through an example: 4% vs. 5% interest rate 

If you want a 4% rate on a 30-year fixed mortgage on a home worth $400,000, your monthly mortgage payment would be $1,900. But if you only qualified for a 5% rate on a 30-year fixed mortgage, your monthly payment would rise to $2,138.

A 1% increase in interest raises your monthly payments by $238, or roughly 13%. So, what does this mean for homebuyers?

From a home buyer’s perspective, as mortgage rates increase, affordability goes down. If you want to qualify for a $400,000 mortgage at 4% interest, but at 5% interest, lenders can only offer you a $355,000 loan based on your qualifications. A 1% increase in mortgage interest decreases your purchasing power by $45,000!

Did you know?
According to the latest Gallup poll, owning a home—whether in Greenwich, Connecticut or anywhere else in the U.S.—is Americans’ most trusted long-term way to grow wealth.

How mortgage interest rates are determined

Mortgage interest rates fluctuate depending on broader economic factors and investment activity too. The secondary market also plays an important role. Freddie Mac and Fannie Mae bundle mortgage loans and then try and sell them to investors looking to turn a profit. Whatever interest rate these investors are willing to buy the mortgage-backed securities for dictates what rates lenders can set on their loans. This drives up or down the average monthly interest rates on mortgage loans.

Securing a mortgage with a broker or lender

For many, securing a mortgage can be the most stressful part of home buying. You have to get your finances in shape, review your credit score, and shop around for the best rate when applying for a loan. You can choose to work with a direct lender or a mortgage broker.

Did you know?
Low interest rates make for a competitive market for brokers. You should shop around different mortgage brokers and lenders to get the most competitive rate.

You affect the interest rates offered to you

The exact rates you’re offered by a broker also depends on your own financial situation. Things like your credit history, debts, credit score, annual income, and other factors all play a role in what rates a lender can give you.

Considerations a lender takes into account

  • Credit score
  • Cash reserves and assets
  • Income and employment history
  • Repayment history and any collections, bankruptcies or other financial events
  • Debts
  • Down payment
  • Property location
  • Loan type, term, and amount

 Generally, the riskier you are as a borrower, and the more money you take out, the higher your rate will be.

The bottom line:

An easy way to research current interest rates is to use a mortgage calculator. Just keep in mind that buying a home and trying to decipher interest rates can be very confusing to the untrained eye. Don’t hesitate to ask your real estate agent about different brokers and lenders in their network.

Looking at homes in Greenwich, CT area, or just interested in knowing more about interest rates and how they affect home buying? Comment below, call or schedule a meeting with Longo Realty Group today.

Note: The home featured in this blog is currently available for purchase. $935,000, 3 bedrooms. Located in Greenwich, CT.

Located on a coveted street just steps from Greenwich Avenue and a short walk to the train. The sun-filled first floor offers an open floor plan with high ceilings, tastefully updated kitchen, and a full bathroom, all wrapped with an incredibly welcoming front porch. The upstairs includes 3 well-sized bedrooms and a full bathroom w/ attic access.

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3 Surprising Insights About The 2019 Greenwich Real Estate Market

greenwich real estate

Now that we are two month’s into the new year, the 2019 real estate market in Greenwich, CT is taking shape. This year, Fairfield County real estate as a whole is projected to have more listings and serious first-time home buyers.

So does this mean all the long-frustrated, aspiring homeowners and sellers of 2018 will finally crack open a bottle of champagne and celebrate a closing? We think so!

We’ve mapped out 3 key insights on the 2019 Greenwich housing market below for buyers and sellers.

3 key observations for the 2019 Greenwich real estate forecast, according to Longo Realty

Townhouses are likely the best pick for an entry level home

Are you a first time home buyer or looking to downsize? You should consider a townhouse! (Especially if a single-family home is out of your price range in the Greenwich, CT area.)

New townhouse developments are sprouting up all over Greenwich this Spring. The new townhouses being developed in Greenwich have high-end luxury appeal. The new 2019 listings boast walking access to train, shops in town, require zero maintenance, and are priced appropriately! They are generally more affordable than the single-family style homes in the area.

greenwich real estate
The 257 Bruce Park Avenue, Greenwich, CT project townhouses rendered in the picture above are a great example of the new well-priced listings in the area.

The market of these smaller style homes is being mainly boosted by millennials. A lot of them are moving from renting to owning their first time home.

Did you know?
According to Robert Dietz, chief economist of the National Association of Homebuilders, townhouses are the best entry-level choice for a home for 2019. This is especially true of buyers living in high-cost areas with wage and job growth- like Greenwich.

More home listings and variety to choose from

One of the biggest complaints about the housing market over the past several years has been the lack of homes for sale. This fueled bidding wars, prices, and also increased levels of frustration among buyers and sellers.

Did you know?
The supply of houses on the market hit a historic low in the winter of 2017.

More inventory is expected to hit the markets later this spring. Longo Realty is predicting a rise of 10 – 15 percent in areas such as Greenwich, CT that have homes priced at $1 million and higher. And this is going to be especially true of newly built listings!

The overall boost in listings this year is good news for the ‘move-up’ or ‘upgrade’ buyers, who are upgrading from a starter home to their second.

Bruce Park construction is well underway by Catalyst Constructions. It is projected to be complete in May 2019.

It’s easier to afford a luxury single-family home in CT than NY state

Moving out of the city to a single-family home in suburbs or looking to upgrade from a modest starter home?

Housing values are expected to go up this year across the board at a modest pace between 2-3 percent. But compared to other NYC suburbs, Fairfield County has some of the fairest priced single-family homes.

For example, compared to other NYC suburbs, single-family homes in Fairfield County don’t have to pay a 1% mansion tax on homes over $1 million.

Did you know?
The chief economist of the National Association of Realtors feels that home sales across the U.S. reached a “cyclical low” recently. He expects sales to rise in the coming months as spring rolls around.

Longo Realty is a family owned and operated business.

The bottom line for buyers & sellers of 2019: Link up with a realtor

If you’re looking to buy: 2019 is a great year to buy, especially if you are looking to buy your first home or are downsizing and planning for retirement! We recommend scoping out the new townhouses at Bruce Park.

Why new and old buyers need realtors: Linking up with a realtor will give buyers better price analysis and convenient access to seeing homes for sale. Buyers can also gain access to off-market listings, a network of attorneys and brokers through their real estate agents.  And learning negotiation tactics from a professional for closing a deal never hurts either.

If you’re looking to sell: When living in an area that has a large number of luxury properties like Greenwich, it’s essential to assess and competitively price your home. Sellers need to be mindful of the growing 2019 competition as the weather warms up. Be ready to list your property appropriately.

Why sellers need realtors: A realtor can conduct a house assessment, point out small cosmetic fixes, bring in staging furniture, and get your home ready for showings. And based on this year’s projections, it’s especially crucial for a seasoned realtor to weigh in. They can bring in their expert knowledge using extensive comparative market analysis (CMA).

Looking to sell or buy a property in Greenwich later this spring? Now is the IDEAL time to link up with Longo Realty!