A buyer must be concerned about more than just prices. The ‘long-term cost’ of a home can be dramatically impacted by even a small increase in mortgage rates.
The Mortgage Bankers Association (MBA), the National Association of Realtors, and Fannie Mae have all projected that mortgage interest rates will increase over the next twelve months, as you can see in the chart below:
It does not matter if interest rates are high, low or inbetween. Buyers do the best they can with the rates that are and get into the real estate game. Then refinance or sell on the way up to replace the place. My first home loan was a 12.25% fix rate at a time of 16% adjustable and I felt pretty good climbing out of the rent rut.
I think those numbers have merit to see a gradual increase. Rates have stayed so low for so long due to monetary policy on MBS. To infuse more private investment into mortgage-backed securities, investors are going to demand an increased return. There may be some weeks or months with more volatility but overall any buyer should not let a .25% variance over a month or so diffuse their intent to proceed with a purchase.
Contact Real Estate Agent with RE/MAX Crossroads in Cuyahoga Falls and Stow, Ohio Tony Morganti (330) 352-9513 servicing Cuyahoga Falls.
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