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Yes, Mortgage Rates Have Increased!!

Good Monday Morning!

Yes, mortgage rates have increased over the past several months after a long run at record low levels.  This has certainly slowed our local housing  market in the Eugene and Springfield area.  With every closed door another one opens.  This is actually a great time to think about purchasing a home and here is why: The inventory of homes for sale has increased.  This means that there are far more homes available to choose from than previously.  There are not as many buyers in the market right now.  This means that the competitive market of the past is long gone and you will most likely not have to get into a bidding war. Home prices are declining and are much softer than earlier this year.  The homes you are looking at are most likely listed a lower price than even several months ago.  You may also be able to negotiate a better price than the listed price.  This is something that you could not do earlier this year or for the past several years.  Because the market is softer, you will not have to make concessions to a seller with your offer.  Up until recently, most buyers were waiving repairs, inspections or even the appraisal in order to have the opportunity of having the seller look at their offer.  Lastly, mortgage rates have increased, but they remain below the 30 year average.  Chances are that rates will increase even more in the coming months, making this a golden opportunity for a better priced home at a mortgage rate that remains lower than the 30 year average.  Remember, rents are up as well as mortgage rates and rents will continue to soar for the foreseeable future.  You are always going to be making a mortgage payment.  It’s your choice whether that mortgage payment you make is for yourself or for your landlord.  Here is a recent article from “Realtor.com”that speaks to our current mortgage loan situation.

Mortgage rates rose for the fifth consecutive week, reaching yet again the highest level since the financial crisis.

The average rate on a 30-year fixed mortgage climbed to 6.29%, according to a survey of lenders released Thursday by Freddie Mac. It was the second week in a row that rates topped 6%. The last time rates were this high was October 2008, when the U.S. was deep in recession.

The sharp rise is another product of the Federal Reserve’s campaign to curb decades-high inflation. On Wednesday, the central bank raised interest rates for the fifth time this year. Officials indicated that more large increases are on the way even if such moves risk a recession.

A year ago, mortgage rates were 2.88%.

Higher rates affect virtually every corner of the economy, but their effect on housing is particularly acute since higher rates can easily add hundreds of dollars to a buyer’s monthly mortgage payments.

Take a borrower who buys a $500,000 house with a 20% down payment. With a 2.88% mortgage, that person can expect to pay about $200,000 in interest over 30 years for their $400,000 loan, according to a mortgage calculator by Bankrate.com. With a 6.29% mortgage, the borrower could pay more than $490,000 in interest.

Higher rates have cooled housing significantly. Though home prices continue to notch year-over-year gains, prices are falling month-over-month. Many would-be buyers are getting priced out of homeownership. Many homeowners feel stuck in place, since selling would mean taking on a mortgage with a significantly higher rate.

The national median mortgage payment was $1,839 in August, up 33% from the start of the year, the Mortgage Bankers Association said Thursday.

Mortgage rates don’t move automatically when the Fed raises its rate. They typically rise or fall in tandem with the benchmark 10-year Treasury yield, but that yield is heavily influenced by expectations for Fed rates. The 10-year yield this week hit its highest level since 2011.

Have An Awesome Week!

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

THIS WEEKS HOT HOME LISTING!

3100 Emerald Place, Eugene, OR 

Price: $575,000    Beds: 3    Baths: 2.0    SqFt: 2006

Mid Century Modern, architecturally-designed home in a great SE Eugene location! It has a fantastic spacious floorpan and a large beautiful patio to relax or entertain in while you enjoy expansive views of the City and surrounding hills. The large master bedroom features a walk in closet, ensuite and doors to a courtyard patio. You won't find another home like this one...View this property >> 

AND HERE'S YOUR MONDAY MORNING COFFEE!!

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