Are Mortgage Currently Low Mortgage Rates Sustainable?

Real Estate Agent with Joy Daniels Real Estate Group, Ltd.

It certainly has been nice to have the interest rates so low for so long. . . even dipping to never seen before (in my lifetime) low rates!!  I ask the different Central Pennsylvania, Harrisburg area lenders that I work with how long they think the rates, albeit starting to creek up, will still remain low.  I ask just in case they have any inside information as a lender that they can share with me.  Of course none of them really do have the inside scoop.  I recieved this email from one of the great Camp Hill lenders that Joy Daniels Real Estate Group often consults and she told me that I could definitely share their opinion with you.  It's good to know what is happening because all of our clients ask.  Hopefully you will find a key "phrase or answer" in this post.  I highlighted a very favorable statement and bolded the answer I like to give to people that ask me "if I have the inside scoop!"

                                       Are Mortgage Rate Lows Sustainable?


Is This Trend Sustainable?

Speaking of trends, we'd be remiss not to mention the trend in mortgage rates, which has been rising over the past month. Indeed, the rates on some mortgage products are up over 25 basis points. So the obvious question is, will the trend continue?

Opinions are mixed, but they tend to lean toward the trend reversing. Some analysts believe that impending government spending cuts and tax increases, which could occur in 2013, will further slow economic growth. That means money will leave riskier investments like stocks and head for haven investments like U.S. Treasury securities. The demand for these securities, in turn, will lead to lower mortgage rates.

Then again, maybe the economy isn't as bad as many economists believe. Housing has always been a key component in economic growth, and the outlook for housing is pretty darn good these days. In fact, Fannie Mae's Economic & Strategic Research Group believes that increases in residential construction will add 0.2 percentage points to gross domestic product this year. Housing construction and home sales have a cascading effect, producing additional demand for home furnishings and many other retail products and services.

The rising trend in mortgage rates might be unsustainable, but even if rates reverse course, recent history suggests they aren't going to reverse much lower. Therefore, it's important to remind our home-purchase clients that rates have risen, but any savings achieved by waiting for a reversal could be offset by a higher purchase price.







Posted by


Joy Daniels, GRI, ABR, CSP, e-PRO
2793 Old Post Road, Suite 200
Harrisburg, PA  17110

(717) 695-3177  office - Call TODAY and let me help you find your dream home! - Email TODAY and let me help you find your dream home!

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Kathy Sheehan
Bay Equity, LLC 770-634-4021 - Atlanta, GA
Senior Loan Officer

Rates have edged up in the last 10 days but are still very reasonable.  Now is the time to take advantage of the low rate.

Aug 26, 2012 06:39 AM #1
Joy Daniels
Joy Daniels Real Estate Group, Ltd. - Harrisburg, PA

You are so right Kathy - I hope buyers realize how much money they can truly save with the the low rates and don't wait until it's . . . too late!

Aug 26, 2012 06:55 AM #2
Jessica White
Joy Daniels Real Estate Group - Harrisburg, PA

It's a great time to buy in Central Pennsylvania.  Great info Jessica & Joy! :)

Aug 26, 2012 11:15 PM #3
Rafeeq Ahmed
Islamic Banker, UIF, 682-500-4615 - Granbury, TX
Customer Satisfaction

It has been a great time to buy real estate  for a few years. We as a community need to spread the positve news. customers need to understand that if they have a stable job, they should not worry too much about the economy and buy their primary home. We also need to educate customers that lenders are still lending money even with no so good credit and still they can buy a house minumum down payments.

Aug 29, 2012 01:53 PM #4
Joy Daniels
Joy Daniels Real Estate Group, Ltd. - Harrisburg, PA

You are so right Rafeeq, we definitely need to be POSTIVE - our attitudes will definitely affect our clients.  Great feedback.  Thank you. 

Aug 30, 2012 04:30 AM #5
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