I'm really concerned that those who've taken advantage of the super low rates in the last few years won't tolerate anything much higher. Even I'm getting to where I say that 5.5% is high. How did this happen? I'm pretty middle aged and I thought a rate under 7.5% was just like getting money for free 10+ years ago!
- Since the rates shot up half a point the end of last week, more than a few of my current buyers have blinked!
- Should they wait until the market "settles down"? Or should they take the rate as it is right now before it goes up any higher?
- A few lenders around here are telling their jittery customers to just hang on and give the market a little time to settle down. Is that a fair thing to say? How would they know? Did they know the rate was gonna jump a half point the end of last week?
Apparently the mortgage industry has a big competitor for money right now---the fed! Nothing we do to prop up the markets in our country is free! I think we've been charmed into the idea that there is a pot of gold around every corner, so don't worry, be happy!
If a home is in your future, or a move is in your future, price the home and mortgage rate with a little wiggle room so that you can get what you need, and some of what you want.
Will these rates last for years to come? Who knows?
The Quilting Realtor
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Many Dream Of Living In Montana I'm One of the Lucky One's That Already Do! Wanda Thomas Call or Text 406-698-8640 for help with all things Montana. |
Im not sure what people expect. I think everyone wants low rates of course.
With unemployment numbers going up every day aren't all home buyers worried about where the next paycheck is coming from? A rate under 5% is a psychological pacifier for the home purchase that they wonder if maybe they should not be making.
I think we have real problems ahead, China buys our debt and is raising rates because we aren't "good for it" anymore. The only way we can keep interest rates low (which we need for our economic recovery) is to incur more national debt at high rates. Awful cycle which will kill us eventually.
I do not see these rates lasting forever...and I guess quite a few weren't around during the Carter years...as interest was double digits for houses....they need to buy now!
Wanda, great post. I don't know that I would advise them to wait either. With the market being this volatile, who KNOWS what could happen next -- not even those good at predicting are really predicting right now!
Shane--I think the market will always rule with supply and demand, if it costs too much, people will not purchase until the price for the payment goes down to where it is affordable.
Julie--Paychecks are pretty darn important, I agree.
Karen--We have been warned about letting the international community bankroll our government
BLRGUY--I was around when the interest rate on my first home was 12%. I moved a lot, especially as the rates went down. Now I'm in a 15 yr 5% rate with a huge principal reduction each month, and I love it!!! Only 9 more years to go.
Marney--Rates at 5.5% are a screamin deal if you ask me. Live in the moment!
The near term outlook for interest rates; expect market volatility to continue for the next two weeks. As long as the stock market continues to climb, betting on economic bottoming and early recovery, interest rates will increase. What I am not ready to predict is how high rates will go; at this point I"m not expecting mortgage rates to move much above 5.5% but I caution that the support for lower rates has lessened in the past two months, the 10 yr note has been in bearish technical patterns for almost two months and finally broke loose last Wednesday. The stock market holds one of the keys, the Fed holds another. Some believe the Fed will not let rates increase, using its balance sheet to up purchases of treasuries and more mortgages; I do not believe the Fed will do so, but its out there in the markets' thinking. The dollar is falling quickly; that is also a hurdle to lower treasury rates; as it falls the value of US assets go with it so higher rates may be needed to continue to attract investments in our treasuries. At the moment the rate markets will remain very volatile with intraday and interday big swings.