This past Thursday’s Federal Reserve announcement of no increase in interest rates will keep mortgage rates at 4% for at least the next month until the next Fed meeting in October. This good news coupled with tomorrow’s announcement of a record breaking PFD check of approximately $2,000 per person, give or take a handful of dollars, will make for an active fall home buying market. After all, what better investment for a family of four with $8,000 arriving in their checking account than a new home? For example, $8,000 will pay all your closing costs and prepaids on a $300,000 VA purchase of a home. For an FHA loan, with a minimum 3.5% down payment, the $8,000 will pay all but $400 of the down payment on a purchase price of $240,000 which is more than the current MLS average sales price of $211,313 for a condominium. And for a brand new condo, some builders are providing closing costs and prepaid reserves which would amount to $5,896.92. So, take your permanent fund family dividend, add $400 and ask your local builder or seller to contribute closing costs and pre-paids and you’ve bought yourself a new home for your family. And with today’s high rental rates of over $1,200 for a two bedroom apartment, it’s not unreasonable to say that owning now costs less than renting.

     The permanent fund dividend check comes only once a year but there is almost no doubt that between now and October 2016 the mortgage interest rate will creep up from 4%. An increase from 4 to 4.5% is the difference of approximately $100 per month on a $300,000 mortgage. That may not seem like a lot but it will take four times that amount in monthly income for a buyer to qualify for the same mortgage amount.

     Buyers can also consider using all or part of their dividend to pay down credit card debt which can improve your credit score or give you more buying power because you have less consumer debt. All this information comes from Aileen Dimmick from Residential Mortgage at 952-3860.

     So with oil prices low and the constant media reminder of Alaska’s deficient spending, is now a good time to buy a home rather than take that vacation to Hawaii? Despite the obsession with our deficit spending, Anchorage and Eagle River’s residential market is holding up remarkably well. So far this year, the condo market has shown an appreciation of 2.85%. Anchorage’s single family homes have appreciated 2.63 per cent year to date over last year’s annual appreciation rate of 3.23%. Taking into account all price ranges, last week’s inventory remained below 700 homes for sale. And homes are continuing to sell for 99% of the listed price. Our market has remained stable with low inventory and modest appreciation. Keeping interest rates at an almost historic low has contributed to that stability. Buyers should take advantage of this postponement of a rate increase.