Buffalo Next: The rise in mortgage rates could cost buyers an extra $60,000 |







Buffalo Next

Two percentage points may not seem like much, but just how much will the rising mortgage rates add to your new mortgage costs?

Most likely several hundred dollars per month, or as much as $100,000 or more in total over the course of a typical home loan.

That’s the finding of a new study by LendingTree, the online lending marketplace, which looked at the average monthly payments on a 30-year, fixed-rate mortgage in states across the country. The company compared the payments and total costs on a new loan generated in January – when the average interest rate across the country was 3.79% – to what they were for a new mortgage in April, when the average was 5.25%.

On average nationwide, the report found, mortgage payments on a new loan that was originated in April were higher by $258.57 per month when compared to a loan made in January. In turn, that yields an average of $3,102.82 in extra interest each year, and $93,084.60 more over the duration of a traditional 30-year mortgage.

The Lending Tree study didn’t look at individual cities, but we did, using the same parameters.

Even in inexpensive Buffalo – where the current median home price of $235,000 means a typical mortgage of $188,000 – borrowers would pay $163 extra per month. That’s nearly $59,000 in additional interest over 30 years.

Not surprisingly, the increase in costs was bigger in states where home prices – and therefore mortgages – are much higher, such as California, Washington or Massachusetts. In those states, borrowers could expect to pay $407, $357 and $337 more per month, respectively. Over three decades, that means paying well over $130,000 in extra interest.

New York State – which is heavily skewed by New York city and its pricey suburbs, ranked 7th for the most extra costs, as the higher interest rates result in another $309 per month and $111,171 over 30 years.

By contrast, in Midwestern states such as Ohio, West Virginia and Kentucky – where home prices and, therefore, mortgage amounts are much lower – the monthly payments rose by $200, $201 and $202, respectively. That’s still more than $72,000 in extra interest costs over 30 years.

The study examined mortgage offers for 570,000 LendingTree users from Jan. 1 through April 22.

Want to know more? Three stories to catch you up:

• Ask and receive: What you need to know about home prices and sales

• The rise of the million-dollar buyers

• The housing market is still hot, but it may be poised for a cool-down

Welcome to Buffalo Next. This newsletter from The Buffalo News will bring you the latest coverage on the changing Buffalo Niagara economy – from real estate to health care to startups. Read more at BuffaloNext.com.

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NOT HORSING AROUND

What: A Buffalo vascular surgeon and his wife are the new owners of the former Stellar Equestrian, a vast 42-acre horse estate in Eden with a spacious and elaborate mansion, a guest house, five garage spaces, a 19-stall barn and stable, pastures, fenced paddocks, an all-weather jumping ring, a high-fence training ring, a free walker for six horses, and extra space for offices, trophy rooms, sitting areas and wash stations.

The renovated mansion includes a gourmet kitchen with granite counters, commercial-grade appliances, hardwood floors, three fireplaces, three bedrooms and a walk-out finished lower level. An 800-square-foot guest house and three-car garage at the property entrance has a studio apartment and granite kitchenette. And the 12,000-square-foot heated barn includes a 1,200-square-foot apartment upstairs.

Tell me more: Dr. James Lukan and Rebecca Read-Lukan paid $1.35 million to buy the property at 3618 Eckhardt Road from Robert J. and Clara M. Haefner, who breed and train equestrian horses for jumping and shows, and still own Steller Equestrian farms in Florida and Germany.

Lukan is an attending staff surgeon at Erie County Medical Center, surgical director of the Vascular Access Center, and medical director of diversified clinical services at ECMC’s Center for Wound Care and Hyperbaric Medicine. 

Why it matters: An estate of this size, price and specific use is not common locally, but the sale demonstrates buyers’ growing appetites for such unusual and high-priced properties.

NOW OPEN …

New Caterpillar dealership

Milton CAT has opened a 40,000-square-foot construction equipment dealership at 400 Wheeler St. in Tonawanda, at the site of the former Spaulding Fibre Co.

The operation includes a 10,000-square-foot service shop and an automated vertical parts-stocking system that can use laser location and robots to retrieve more than 22,000 different parts. There’s also a two-acre demonstration area, where customers can test new equipment from Caterpillar, with 3D machine control technology. The dealership will ultimately employ 35, and is now hiring for sales, service and parts jobs.

THE LATEST

Catch up on news tied to Buffalo Niagara’s economy:

Rochester cryptocurrency and blockchain firm Foundry will expand into Buffalo, led by prolific Western New York tech entrepreneur Dan Magnuszewski, who was named chief technology officer of the company.

Detroit-based chemicals distributor PVS Chemicals has acquired local competitor Chemical Distributors to expand its operations in the Buffalo-area.

Kaleida Health could add more than 400 full-time employees by Jan. 1 under plans that will soon be submitted to the state Health Department to comply with a New York hospital staffing law.

Former 43North-winning housing startup Whose Your Landlord has pledged to donate $19,000 to Black-led nonprofit community organizations across the country in honor of Juneteenth.

Community advocates who want to develop a farmers market, grocery store and youth jobs incubator on Buffalo’s East Side plan to share more details about the project Tuesday at a event to commemorate the 10 people killed in the Tops massacre last month.

A restaurateur is finalizing an agreement to open Newbury Salads at LECOM Harborcenter in space formerly occupied by the Healthy Scratch. He also has plans for locations in and around Buffalo General Medical Center.

The Buffalo 5/14 Survivors Fund has received nearly $3 million in donations. The committee for the fund soon wants public input on rules to distribute the money.

What will Buffalo do to memorialize the May 14 massacre at the Tops Markets on Jefferson Avenue and the 10 lives that were lost? Mayor Byron Brown said he and Gov. Kathy Hochul will soon announce plans for a large memorial.

Edwards Vacuum wants to construct a warehouse addition in Wheatfield, while Lockport Schools Federal Credit Union hopes to build a new headquarters office in the City of Lockport, if the Niagara County Industrial Development Agency approves tax breaks next month.

ICYMI

Five reads from Buffalo Next:

1. Nursing homes can’t retain caregivers. Could career ladder programs be a solution?: Perhaps paid training programs, which help employees advance their careers, make more money and provide better care, can help chip away at the staffing crisis in the nursing home industry.

2. A new build for Tops on East Side would have taken ‘years’: Renovating the Jefferson Avenue store will allow Tops to reopen it by the end of July, while building a new store would take years. That timeline is a major reason behind the company’s decision to reopen, rather than rebuild, the location.

3. 43North aiming to attract high-growth companies to the region: Sam Eder moved to Buffalo from Austin, Texas, in January after his company Big Wheelbarrow won the 43North startup contest. Stipulating winning companies set up shop in Buffalo for at least a year is an important aspect of 43North’s mission.  

4. Rachel’s Mediterranean Grill expands beyond Buffalo home: Rachel’s has made it big in Western New York, and the family-owned business is now trying to expand the concept down the Thruway in New York and in larger markets such as Fort Worth, Texas.

5. Doctor recognized for providing aid in strife-torn regions: Dr. Aaron Epstein has been splitting his life between surgical shifts in Buffalo and leading the humanitarian aid group he founded in 2015. Now, he is in line for one of the nation’s top civilian awards.

Recognize Western New York employees in The Buffalo News for FREE

Our newsroom is looking to highlight recent hiresmanagerial or directorial promotionsboard appointments and career honors. Send your information (full name, new title, company name and recent headshot) to BuffaloNext@buffnews.com to be included in the “Movers & Shakers” section of The Sunday Buffalo News and on BuffaloNews.com.

The Buffalo Next team gives you the big picture on the region’s economic revitalization. Buying a building? Redeveloping a property? Got a tip? Reach Real Estate & Development reporter Jonathan D. Epstein at 716-849-4478 or email him at jepstein@buffnews.com.

Email tips to buffalonext@buffnews.com.

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