Mortgage Rates Continue To Climb
Over the last year, fixed rate mortgages have increased on average .82% (a little over three quarters of a percent). Will that slow “trickle up” continue or taper off? As long as the economy keeps rolling on and we continue to have a solid job market, mortgage rates will continue to rise. Inflationary fears should set the tone for Federal Reserve decisions on the direction of short-term rates, which indirectly can affect long-term fixed rate mortgages. The Fed meets next week to discuss the Fed Funds Rate Index. The general sentiment in our marketplace is for rates to trickle up as high as 5.0% this year and possibly a little higher next year.
How will this impact the housing market? The higher the rates go up, there are less people who can qualify for mortgages. The less people buying, the higher home inventory will rise. This in turn will slow down any price increases still occurring around the country, especially in the big metropolitan areas.
Before you make any moves towards the housing market, do a thorough analysis on the benefits to owning over renting. Are the rents continuing to rise in the area you are living in? How much are homes selling for? How long are they on the market? In most cases, buying will still be a better economic option for you. We are always available to help you with this analysis.
To read more on the mortgage rate increase, see below:
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