4% Rates are over - For Good

By
Real Estate Agent with RE/MAX Affiliates

 

50 Year lows on interest rates have begun to rise and most predict that's just the way it's going to be.  According to Freddie Mac's weekly mortgage market survey, average 30-year fixed rates are up to 4.86% from 4.17%.  Bankrate.com has the average at 5.02%, crossing the 5% mark for the second time in 3 weeks.

Rates haven't been this high since May and most industry experts expect them to remain in the 5%-6% range for the rest of the year.  This can be good news for any clients that have been walking the line the last few weeks and could put them over the hump and create some urgency in the market.  

The initial phase of an interest rate increase generally does not hurt markets," said Lawrence Yun, chief economist for the National Association of Realtors. "In fact, it can help."

"If we add 2 million jobs as expected in 2011, and mortgage rates rise only moderately, we should see existing-home sales rise to a higher, sustainable volume," said Yun.

"If the other factors are aligned," he said, "interest rates are not a big thing."

The real mortgage challenge, according to Yun, is to increase the number of loan applicants winning approvals. Too many potential homebuyers are still finding it difficult to qualify for loans.

"The current mortgage market is a unique situation" he said. "It's less about rates than it is about underwriting standards, which are, in my opinion, still too stringent."

"If lenders return to more normal, safe underwriting standards for creditworthy buyers, there would be a bigger boost to the housing market and spillover benefits for the broader economy." 

 

 

 

What do you think the rising rates will do to your market?

 

 

 

 

Posted by

*************************************************************************************

Nick Dailey (CDPE) - Short Sale & Investment Specialist - Northern Kentucky & Greater Cincinnati

Helping families in Northern Kentucky avoid foreclosure.  Northern Kentucky MLS listings of homes for sale.  

Website: www.NickDailey.com

Mobile Site: nickd.m.remax-ohio.com

 

View Nick Dailey's profile on LinkedIn

 

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Rainmaker
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Doug Dawes
Keller Williams Realty - Topsfield, MA - Georgetown, MA
Your Personal Realtor®

I would think that rising rates could get buyers and sellers off their sofas and into the marketplace. Whoa the moaning should we see 6% rates. Shoot, my dad, in 1966 had a rate of 6.25% and that was considered cheap. My wife and I started with a 13% rate.

Jan 04, 2011 02:44 AM #1
Rainer
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Bill Pohl
Tetra Homes, Inc. - Loveland, OH

Nick - I agree that 4% rate are gone for a long time (unless the economy gets screwed up again by the mortgage industry, the housing industry or government). After a second thought, they'll probably be back down to 4% again real soon.

Jan 04, 2011 05:47 AM #2
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Rainmaker
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Nick Dailey

RE/MAX: Northern Kentucky Real Estate - NKY MLS - Short Sale
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