The current impact of the Federal Reserve Bank's recent announcement that it will continue to decrease it's bond buying habit of $85 million per month by mid-2014 have caused mortgage rates to increase 0.53% to an average of 4.46%, the largest weekly increase in 26 years, according to an article published in CNN's Money Section.
This news is already sending waves through the reverse mortgage market which has begun to lag in response, sending investors as well as individual brokers running for the hills--even as expected interest rates are lower than ever before--giving consumers, looking to buy a house, more buying power or seniors, hoping to invest in a reverse mortgage, more money for their home equity.
To me, it's incredible how much one decision can affect the whole market, which had begun to see some stability since the recession. The fact that markets are slowing down, because of the FRB's decision, signals that people looking to invest in a home are looking for reassurance that they will not lose their home, their credit or their peace of mind under the stress of mortgage rates. Also, this demonstrates the instability of the housing market, which still needs some help before being left to it's own devices. There needs to be a guiding force for the time being because this "test" is proving to be anything but beneficial, possibly signaling another housing downturn if the lack of support continues.
As a reverse mortgage company in Florida, PS Financial Services is here to help seniors who want to live a stress-free retirement. Don't get caught under mortgage debt and higher interest rates. Instead, turn your home equity into a steady cash flow in the form of tenure payments or a lump sum to help you pay off your mortgage as quickly as possible. Your home is your most valuable commodity, make sure its there to benefit you after all the years you've invested.
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