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Mortgage Interest Rates May Be On The Rise

Good Monday Morning!

For the first time in a long time, mortgage interest rates edged slightly higher last week.  This could signal the begining of the end for the super cheap rates we have been taking advatage of.  Mortgage rates at around 3% are still an unbelievable value, but all indications are that these rates may go higher.  If you are on the fence about either purchasing or selling a home, now is the time to act.  If rates continue to rise, the market we have today may be changing and your ability to sell at top value and your ability to purchase with super low mortgage rates may erode.  Here is a recent article from "Realtor.com" that talks about the recent changes in mortgage rates.

The rise in mortgage rates followed the upward climb of the 10-year U.S. Treasury yield over the past week—the long-term bond rose to the highest level since June. In both cases, the surge in interest rates came as a reaction to last week’s statement from the Federal Reserve. The central bank signaled it would begin tapering the asset-buying activities that it began last year in an effort to stimulate the economy. The central bankers also indicated that an interest-rate hike could come in 2022.

Among the assets that the Fed has been buying on a monthly basis are mortgage-backed securities. Those purchases by the central bank helped to pump a ton of liquidity into the mortgage market, which allowed lenders to cut interest rates. With the size of the Fed’s purchases likely to decrease later this fall, lenders will be forced to increase rates, according to economists.

That could have ripple effects into the broader housing market. “Mortgage rates remain low and are supporting demand” for homes, Rubeela Farooqi, chief U.S. economist for High Frequency Economics, wrote in a research note Thursday. “However, the incentive to buyers could diminish if rates rise once the Fed starts tapering.”

For buyers still in the market, it will become important to factor in the potential for rising interest rates when determining their budgets, Hale said.

Smart buyers should consider calculating a monthly payment not only at today’s rates, but also at rates that are a bit higher so that they won’t be derailed by a sudden upward move,” Hale said. “Additionally, home shoppers want to carefully consider their must-haves versus nice-to-haves since both rising home prices and higher rates mean higher monthly payments.”

Have An Awesome Week!

Stay Healthy! Stay Safe! Remain Positive! Trust in God!

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AND HERE'S YOUR MONDAY MORNING COFFEE!!

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