Monday, June 24, 2013

Rates Continue to Rise!

Well, as I said last week, if it's not over, the holiday for low rates is certainly slowing down! The past week, rates again went up overall. While you still can get a 30 year fixed mortgage at less than 4%, even without points in some cases, you really have to beat the bushes to find it. Overall, rates have, on average, pierced the 4% mark. Now, that's the 'bad' news. For anyone under the age of  40, having rates in this neighborhood sounds like a total catastrophe! However, there was a time, and it wasn't all that long ago, when rates routinely were over 7%! And if that's not good enough for you, in the early 1980's they topped out over 20%!! No, that's not a typo!
Are they likely to return to those historic heights? Not in your lifetime! Will they get back up to seven or eight per cent? That's possible, but, again, not any time in the near future. The current rise, as previously noted, is due to the fact that, as the economy allegedly continues to slowly improve, the Fed is equally slowly easing the support it's been giving to the interest market. You may recall that last year the Fed announced they'd continue to support low interest rates so as to avoid crushing the weak recovery of the economy. They pointed at the end of 2014 for this program to terminate. Well, as the recovery has continued to improve, they've slowed their rate supporting buyback of Treasury paper. So, rates have begun their upward movement. Another thing that has helped push up rates is the rise, until the past week, of the stock market. Usually, when stocks go up, bonds drop. When that happens, their yields rise, causing the resulting rates to climb in all debt areas--including mortgages.

So, rates are up, with a very slight amelioration of that situation at the end of last week. What does that mean for you in the housing market? If you're a buyer, MOVE FAST! Every quarter percent increase in interest rates cost you hundreds of Dollars in your monthly mortgage payment. If you're a seller, it's just one more reason to get your home on the market, properly priced and ready to go! This is because as buyers get even more active in their desire to find a home, it improves your chances of selling and for a better price.
Questions about your home's value, or about the best mortgage deals? Call us for a free valuation on your home; or a referral to a top mortgage broker who can give you the best deal on a loan--and not just as to rates! Peter: (415) 279-6466; Jane: (415)  531-4091. We'd be happy to assist!


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