Buying a House In Salt Lake? It Just Went Up!
The monthly cost of buying a house or condo in Salt Lake just went up.
Conforming mortgage rates rose by 0.625 percent Wednesday. Yes, you read it right. Zero-point-six-two-five percent.
The surprise surge in pricing started shortly after 1:00 P.M. ET, then continued all the way until the market's closing. It was the sharpest one-day surge in mortgage rates in recent history. Perhaps ever.
One of our clients that was buying a West Jordan Home but decided not to lock in her rate, saw her payment increase by $70.00 a month in 30 minutes.
For mortgage rate shoppers swept up in the surge, monthly payments are now higher by $29 per $100,000 borrowed.
That's a significant shift.
For as rare as Wednesday's events were, though, middle-of-the-day, 0.625 percent rate changes don't just happen. Yesterday, the action was the result of a confluence of factors, including:
- Rising oil prices and gas prices
- Optimistic predictions about the end of the recession
- Concerns over the U.S. total debt load
- Fears of longer-term economic inflation
In addition, momentum trading played a role.
As markets worsened, selling begat more selling, amplifying Wall Street's total losses. As mortgage bond prices fell, mortgage rates went up. By a lot.
Mortgage markets are notoriously fickle and yesterday's events proved it. Days like Wednesday are precisely why insiders recommend shopping for mortgage rates in a compressed time frame. The faster you finish, the lower the risk of losing low interest rates to new market conditions.
While interest rates are only one third of a formula that has made this the best home buyers market Salt Lake has ever seen, the other two legs are impacted as well.
Low Salt Lake home prices featuring an abundance of short sales, foreclosures and bank owned homes have been a driving force in sustaining even a small bit of Real Estate momentum.
An increase in interest rates acts just like a price increase since most SLC home buyers pay more attention to monthly payments than the overall cost of the house.
What a Utah home buyer can qualify for is dependant on debt to income ratios. Larger monthly house payments narrow those ratios so that fewer homes are available to choose from.
If you have been thinking of buying a new home in Salt Lake and don't have your approval letter from your lender, Log into our website@ Salt Lake Real Estate then search for either a home or a lender to get things started.
Or you can just call us @ 801-567-0946 and lets figure out what to do next.
Before buying a house in Salt Lake City goes up again.