The biggest real estate news right now is what is happening with mortgage interest rates.
For the past couple of years there have been predictions and concerns about the Federal Reserve raising their benchmark rate, which is the interest rate banks are charged when they borrow funds overnight directly from one of the Federal Reserve Banks. However since the end of the Great Recession, the Fed has only raised rates once, in December 2015, and has put off additional increases time and again, citing continuing economic uncertainties.
It’s now looking pretty certain that when the Fed meets in December, the rate increase will finally happen, according to CNN Money’s Kathryn Vasel. It will be the second rate hike since the recession.
In talking today with our own lending partner, Justin Weissman of Primary Residential Mortgage, LLC, I learned that immediately following the recent presidential election the bond market increased more in one day than it has in the past 30 years. Bonds prices and interest rates are strongly tied to each other, so it is reasonable to expect to see mortgage interest rates to continue to move upward.
Additionally, “…there are several potential explanations for the jump in interest rates. First, markets are anticipating tax and regulatory changes that may help stimulate economic growth in the near term. These changes could also put upward pressure on inflation. Both factors would lead to higher rates,” explained Justin.
How does this affect us and our clients?
First, if you’re planning to stay put and refinance your home, don’t delay. Rates are still historically low (I can remember double-digit interest rates), and a few years from now you’ll be thrilled about your low, fixed-rate mortgage.
And ditto for home buyers. Never mind that your buddy bought a home a couple of months ago with a 3.37% interest rate! It is inevitable that rates will go up with time, and the loan you get today will be at a rate you will never want to refinance.
For home sellers, the time to sell is when buyers want to buy. We still have too few homes for sale compared to the buyers in the market, and those buyer numbers are going to swell to get deals done before rates get much higher. There isn’t a better time to get your home listed.
Contact us today for advice or help with buying or selling a home. We’re here when you need us, 727-286-1249.Google+