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Thursday, 27 June 2013
The Truth About Rising Mortgage Rates
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Rates are going up, but how does that affect your house-buying timeline?

Today I called in another kind of real-estate expert to answer this question: loan officer Todd Wiggins. Here is his explanation and advice for the current Brentwood, Tenn., real-estate market:

Many of you have heard that interest rates have taken a quick, big jump up. Ask those who have purchased a home or refinanced in the last year and they most likely have a 30-year fixed rate in the 3% range or a 15-year fixed in the high 2’s. Those rates have jumped up into the 4’s and 3’s respectively during the past two months. I’ll spare you the technical details as to how this happened, but I will tell you that a stronger economy and the Federal Reserve’s talk of tapering their bond buying program have caused the markets to move dramatically. (I’ve even heard this movement described as “violent.”) 

I’ve had several of my own clients who have been shopping for their next home ask if the rates will come back down, and while I don’t have that magical crystal ball, the best advice I can give a potential buyer is not to hold out for rates to go back into the 3’s again. I’ve always felt that the best time to buy is when “you are ready.” We can’t even be certain that rates will stay where they are now. “Volatility” is a word I hear daily.

While rates may be uncertain, the appeal of owning a home has not changed. Rents certainly aren’t getting any cheaper and anyone who owns a home and is in the market for a new home is likely not at a rate lower than what is available even now. Newly constructed homes are loaded with features and are energy efficient. Homes in good school zones will always have their appeal. There are plenty of reasons to buy a home. If you are thinking about buying, my recommendation is that you consult a loan officer and find out what is possible and what your specific options are. Create a roadmap to your next home. Find your best price point, how much you need to “get in” and what it takes to “stay in” and go see what is out there.

While rates are up from their all-time lows, consider the all-time highs. The chart below shows where rates have been for the past forty-two years. As you can see, things aren’t so bad after all. The housing market is rebounding, the economy is picking up, and your next home is out there waiting for you.

Todd Wiggins
Loan Officer, NMLS 211744
First Community Mortgage
615-964-6714
todd@toddthelender.com
http://www.thelenderofchoice.com

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Posted on 06/27/2013 3:44 PM by Jarod
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