Traditionally, when mortgage rates go up, the price of homes go down. However, unlike history, raising interest rates this time will do the opposite. Interest rates have been so low for so long, it's become expected and has caused buyers to take the wait and see approach.
Mortgage rates are near historical lows. Freddie Mac reported last week that a 30 year fixed rate mortgage averaged 3.66% and a 15 year fixed rate mortgage rate averaged 2.98%.
In my opinion, we won't see rates like this again in our lifetime.
Janet Yellen at the Federal Reserve continues to hint that she plans to raise its target federal funds rate the middle of this year, which will cause mortgage rates to rise. Many economists predict that a 30 year fixed rate mortgage will average 5% by the end of the year.
This move by the Fed will cause a surge of buyers that have been sitting on the fence to jump into the buying game.
The laws of supply and demand will prevail.
Current inventories will be purchased and new supply will be less than demand, causing a sellers market. Sellers can ask what they want, because there will minimal competition.
The Fed is asking the markets to be patient when asked the timing, describing it's approach to picking the time to raise the target rate. So, buyers beware! The clock on a low mortgage rate is ticking!
Homebuyer's need to move fast if they want to get a low price and a low interest rate, according to Realtor.com. In my opinion, affordability may decline as much as 10% this year. So, get in the game!
Buying or selling a home in the Tampa bay area?
Call me today!
Curtis Rudolph Realtor®
813.240.6054 cell/text
Buying a new home means you need to spend a lot of money. If you don't have enough money to cover your home bill, then you can take a mortgage. A mortgage broker can help you to get the best mortgage term and rate. Hiring a mortgage broker is a good idea to reduce the interest rate. Best Mortgage Rates Oshawa
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