Rhode Island Housing has set interest rates on mortgages at an historical low of 4.5 percent. It is the first time since June 1999 that rates have been so low.
Marc Leone is the senior manager of First National Funding in Warwick, a participating lender. He said RI Housing is able to offer these rates because of economic conditions and the Federal Reserve’s move to lower rates. Leone said the only problem is that there is little inventory in Rhode Island.
Rhode Island's Market Has Changed. Developers, Builders, Investors and Sellers Must Change With It.
By Emilio DiSpirito IV License Partner | Engel & Völkers Oceanside Leader | The DiSpirito…
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“It’s kind of a Catch 22,” he said. “With low rates people are feeling good about their purchases, yet they can’t find a house.”
Rob Scaralia, broker/owner of RE/MAX First Choice in Cranston and president of the Greater Providence Board of Realtors, put a positive spin on this perspective.
“What this means is existing buyers have a greater affordability,” he said, “and that might step it up so they will buy new houses, and in selling, that will bring new first-time buyers in.”
“Low interest rates are attractive to everyone,” he said.
Chris Barnett, a spokesperson for RI Housing, agreed.
“This will have a ripple effect throughout the real estate market,” he said. “Falling rates are healthy. They get everyone thinking about buying homes, even people who make too much to qualify for our help.”
People who qualify for RI Housing’s help include first-time homebuyers if their income does not exceed $49,800 for a one or two-person household or $57,270 for a household of three or more.
The purchase price limits are $133,654 for an existing single family home or condominium, $150,495 for two-family homes, $168,163 for newly built single family homes and condominiums, $182,304 for three-family properties and $211,842 for four-family properties.
Janet Audet, GRI, a Realtor with Coventry’s Century 21 Towne Crier said homes at these prices do not last very long on the market.
“Anything that comes on the market for the R.I. Housing price range goes very quickly,” she said.
Audet listed a house in Scituate that received 50 calls on the day it went on the market, and was sold at the end of the day for $90,000, when the asking price was $89,900.
“With rates as low as they are, anybody that is in any position to purchase, and isn’t buying right now must have a serious problem,” she said. “Rents are higher than what some of these people are paying for their mortgages.”
