Interest Rates are Headed Upward in Lancaster Co., PA

Reblogger Don Hess
Real Estate Agent with KW Elite Keller Williams 1280 Plaza Blvd. Lancaster, PA 17601 AB067316
http://activerain.com/droplet/4XDq

   While interest rates may be going up, this article explains

why there is no reason to panic. So stay calm and call me. 

I'll help you get pre-approved for a loan.

 

Don Hess

KW Elite
Keller Williams Realty
1280 Plaza Blvd.
Lancaster, PA 17601
717-553-2500 Office
717-715-6288 Mobile
717-786-7967 Direct
donhess39@gmail.com 
Original content by Michael J. Perry

Why Are Mortgage Interest Rates Increasing?

Why Are Mortgage Interest Rates Increasing? | MyKCM

According to Freddie Mac’s latest Primary Mortgage Market Survey, the 30-year fixed rate mortgage interest rate jumped up to 3.94% last week. Interest rates had been hovering around 3.5% since June, and many are wondering why there has been such a significant increase so quickly.

Why did rates go up?

Whenever there is a presidential election, there is uncertainty in the markets as to who will win. One way that this is noticeable is through the actions of investors. As we get closer to the first Tuesday of November, many investors pull their funds from the more volatile and less predictive stock market and instead, choose to invest in Treasury Bonds.

When this happens, the interest rate on Treasury Bonds does not have to be as high to entice investors to buy them, so interest rates go down.  Once the elections are over and a President has been elected, investors return to the stock market and other investments, leaving the Treasury to raise rates to make bonds more attractive again.

Simply put, the better the economy, the higher interest rates will go. For a more detailed explanation of the many factors that contribute to whether interest rates go up or down, you can follow this link to Investopedia.

The Good News

Even though rates are closer to 4% than they have been in nearly 6 months, they are still slightly below where we started 2016, at 3.97%.

The great news is that even at 4%, rates are still significantly lower than they have been over the last 4 decades, as you can see in the chart below.

Why Are Mortgage Interest Rates Increasing? | MyKCM

Any increase in interest rate will impact your monthly housing costs when you secure a mortgage to buy your home. A recent Wall Street Journal article points out that, “While still only roughly half the average over the past 45 years, according to Freddie Mac, the quick rise has lenders worried that home loans could become more expensive far sooner than anticipated.”

Tom Simons, a Senior Economist at Jefferies LLC, touched on another possible outcome for higher rates:

“First-time buyers look at the monthly total, at what they can afford, so if the mortgage is eaten up by a higher interest expense then there’s less left over for price, for the principal. Buyers will be shopping in a lower price bracket; thus demand could shift a bit.”

Bottom Line

Interest rates are impacted by many factors, and even though they have increased recently, rates would have to reach 9.1% for renting to be cheaper than buying. Rates haven’t been that high since January of 1995, according to Freddie Mac.

Buyers , it is very important that you obtain Mortgage Pre-Approval . Email mikeperrykw@gmail.com to start this process .
 

 

Michael J. Perry

KELLER WILLIAMS of Central PA

 

930 Red Rose Ct.#102,     Lancaster, PA 17601

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Longtime West Lampeter resident and Lancaster County Realtor!

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Re-Blogged By Re-Blogged At
Topic:
Real Estate Market Trends
Location:
Pennsylvania Lancaster County Quarryville Solanco School District
Groups:
Chester County, PA
Southern York County
Berks County PA Homes for sale and info
South Central Pennsylvania Realtors
Lancaster PA Real Estate
Tags:
interest rates
sales
home
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real estate
upward
lancaster county pa
downward
quarryville pa

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Rainmaker
4,391,126
Roy Kelley
Realty Group Referrals - Gaithersburg, MD
Roy and Dolores Kelley Photographs

Smart consumers are taking advantage of the very low mortgage interest rates that are available now but may not be available later.

Nov 25, 2016 07:33 AM #1
Rainmaker
4,391,126
Roy Kelley
Realty Group Referrals - Gaithersburg, MD
Roy and Dolores Kelley Photographs

We enjoyed a visit to Lancaster last week. There is much to see and do.

Nov 25, 2016 07:34 AM #2
Rainmaker
232,438
Don Hess
KW Elite Keller Williams 1280 Plaza Blvd. Lancaster, PA 17601 - Quarryville, PA

Lancaster is a neat city and county Roy. It's a fun place to do business. 

Nov 30, 2016 09:10 AM #3
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