What is Inflation? According to Investopedia, inflation is a sustained increase in general level of prices for goods and services and is measured as an annual percentage increase.
For the past several years, low interest rates have ruled the mortgage world and consumers have come to expect this when purchasing a PA modular home. For homebuyers and those working in the factory-built housing industry, we would love to see this trend continue. However, all good things must come to an end – even low interest rates.
The Federal Reserve Chair, Janet Yellen, recently said she expects federal funds rate to increase as the US economy continues to strengthen (The Guardian). Economists generally define this increase as inflation; and when the economy experiences an inflation, every dollar you own buys a smaller share of goods and services.
In a perfect world, wages will rise to match the price of products and goods so consumers can still make purchases and keep the economy flowing. However, that might not happen in your job or happen fast enough to match the inflated values of cost.
The same monthly payment will buy a lot more home now than it will at a higher rate. For some homebuyers, higher rate means a smaller home or eliminating what they want in a property like a garage or a yard big enough for their kids to play in. For others, this puts homeownership out of reach. Additionally, the cost of homes will rise as well due to increases in building materials and labor rates.
No one can accurately predict how prices and inflation will change in the next year or even the next six months. What we do know is that home prices are still affordable, mortgage interest rates are still at historic lows, and inflation is in the near future. All of these factors make now the right time to buy a new home. Take advantage of the current rates and maximize your buying power today!
Contact us today to schedule a tour of one of our pa modular homes – (570) 962-3348.
Information taken from CountryPlace Mortgage April 2015 Industry Insider Newsletter.