As summer winds down, some home buyers in Massachusetts are still waiting for the perfect opportunity to pull the trigger on their home purchase. With higher interest rates looming as a possibility, some mortgage professionals are urging fence-sitting home buyers to make their move.
Last week, rates for 30-year home loans edged down a bit, staying close to record lows that were seen in the spring.
According to Freddie Mac, the average 30-year fixed rate mortgage was 5.08 percent which is down from 5.14 percent a week earlier. 15-year fixed rate mortgages fell to 4.54 percent, from 4.58 percent previously.
Bob Walters, chief economist at Quicken Loans says, "The best time to buy a house or refinance - solely from an interest rate standpoint - is now. All of us who have been in the business for a while know that interest rates rise faster than they fall and they usually rise in a very unexpected time frame. People could wake up to substantially higher mortgage rates at some point."
While interest rates are usually tied to the actions of the Federal Reserve, the anticipated inflation rate may be a more accurate indication of where mortgage rates may be heading. Currently, inflation fears are rising after two years of monetary and fiscal policies that were intended to help our faltering economy. In particular, two Fed policies that have kept interest rate low are set to expire over the next few months.
The Federal Reserve's campaign to buy $300 billion in long-term U.S. Treasury securities will be winding down in October, and, its plan to buy up $1.25 trillion in mortgage-backed securities will be expiring at year's end. Some lenders anticipate that these events could influence the direction of mortgage rates.
Other factors that may affect your buying power are a couple of Federal programs that have been set up to boost the home market. They include:
- The First-time homebuyer tax credit of $8,000 which is scheduled to end on November 30.
- Increased Fannie Mae and Freddie Mac conforming loan limits in high-cost housing markets. These are set to expire at the end of the year.
Of course, it is my hope that these programs will be extended into next year, and some in Congress are working on that outcome - but, there is certainly no guaranty that it's going to happen.
So, right now, there are some very good reasons to get in touch and begin the process of your new home purchase as soon as possible.
Do you have questions about buying a home in the Metrowest area? I would love to talk with you. Please feel free to call me at 508-881-6230 - any time or E-mail me.
Copyright 2009 - Claudette Millette, Broker, Owner, TheBuyersCounsel - 800-392-1446, E-mail
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