Mortgage interest rates seem to be a hot topic among economists, housing market analysts, and the media these days. But what's really going on?
The facts are:
•Mortgage rates hit a historical low in October 2012 at 3.8% (at an average 30 year fixed rate loan) according to Freddie Mac.
•Mortgage rates slowly creeped up and then dropped back down in 2013, still remaining relatively low all year.
•The Fed announced in December 2013 that they'll be cinching the purse strings on the bond buying program- which is the program that kept the lid on long-term interest rates in an effort to stimulate a relatively weak economy.
What the analysts are predicting:
•Home Values will rise, some are predicting as much as 3%
•Mortgage rates will creep toward 5.5%
•Mortgages will be easier to obtain
What this means to Home Buyers:
Today's fixed rate mortgage is hovering right around 4.5%, and with the expectation of 5.5% in the near future, the 1% increase will decrease a buyer's purchasing power by as much as 10%. So if you were looking at homes for sale in the $200,000 price range, you may want to consider similar homes in the $180,000 price range.
What this means to Home Sellers:
If you took advantage of the historically low interest rates in the last few years, whether as a purchase or as a refinance, you may consider letting a buyer assume your loan, as part of the negotiations. Or, consider the amount of equity you will gain with the slowly rising home values.
As with anything, we need to try to make the most informed decisions, and there are no crystal balls in real estate! For the most accurate, local real estate information, give me a call! I'd love to discuss what's going on in the Jacksonville real estate market with you!
Amanda Parmer, REALTOR, Keller Williams Realty
910.545.0450
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