Part
II – Interest Rates Are Increasing
A big component in the cost of a home
is the mortgage interest rate a purchaser pays. Understanding where rates are
headed will help in making a decision whether to buy now or wait.
So,
Where Are Rates Headed?
No one can know for sure. The Fed has
been artificially holding rates down to stimulate the economy. However, as the
economy improves, many experts expect rates to creep up. As an example, HSH
Associates, the nation’s
largest publisher of mortgage and consumer loan information, recently
explained:
“The stronger the
economy becomes, the higher rates may grind; the Federal Reserve is keeping
them low to goose the economy, but an economy responding to the Fed’s medicine
will soon see less of a need for it in order to function. If not otherwise
manipulated, higher rates are the natural result of a growing economy, as
rising demand for available credit supply and concerns about inflation allow
costs to rise.”
The Mortgage Bankers Association
(MBA) agrees. They were quoted in HousingWire late last year regarding
their thoughts on where rates would be headed in 2013.
“After reaching
record lows in 2012, mortgage rates are expected to creep up slowly in 2013,
the Mortgage Bankers Association predicted.”
In the MBA’s latest Mortgage Finance Forecast they forecast that the 30 year interest rate will be 4.3% by
the end of the year. This represents an increase of almost a full percentage
point from the 3.4% rate available at the end of 2012.
For example, we show the impact a one
percent increase in rate will have on the monthly principal and interest payment
on a $200,000 mortgage.
Freddie Mac’s Weekly Primary
Mortgage Market Survey
reveals that rates have increased by 2/10ths of a percentage point already this
year.
As we mentioned, no one knows for
sure where rates will be a year from now. But, many experts think they may
be as much as a point higher. With rising residential real estate prices and the possibility of higher mortgage rates, waiting to
buy a home makes no sense in our opinion.
Article
Courtesy of KCM BLOG
MacIntyre
& Cowen, RE/MAX Real Estate Professionals Grand River, would gladly provide
a complimentary Over-the-Net Home Evaluation or email alerts to Hot Buys /
Foreclosed / Liquidation & Luxury Distressed Properties in the Mid Michigan
areas including Greater Lansing, Haslett, Okemos, East Lansing, Grand Ledge,
Holt, Williamston, Mason, Eaton Rapids, Dimondale, Dewitt areas and more. Feel free to contact us at 517.999.2675 or
visit us at www.pmachomes.com today!
This is a nice blogs that focus on the topic that how rate of interest are booming with the increase of rise in economy and how it effect our Home Loans and Home Rates. Thx for posting this blog as it stress my attention to buy home as soon as possible
ReplyDeleteLorn Austin