Will Rates Go Up In The Near Future?
There are two quotes that came out recently with in the last 30 days that could be of concern.
The first was from Doug Duncan, the Chief Economist at Fannie Mae who said “I don’t think the Fed ultimately would be troubled with a 6.5 percent mortgage rate.” He doesn't think that the Fed would be troubled if interests rates went up to 6.5 percent.
Then Frank Nothaft, Freddie Mac’s Vice President and Chief Economist, said “As the economy continues to improve we expect to see continued upward movement in long term interest rates.” “At today’s house prices and income levels mortgage rates would have to be nearly seven percent before the U.S. median priced home would be unaffordable to a family making the median income in most parts of the country.”
The fact that both of them came out within a week of each other saying almost the same exact thing, that rates between 6.5% and 7.0% won’t really matter too much, leads me to believe that that’s where they think they’re eventually heading.
Now do we know that for sure? Of course not. But if both chief economists for Fannie Mae and Freddie Mac are both saying the same thing they probably got it from somewhere.
So if you want to wait to buy, that's fine. If it’s not time for you to buy a house, don’t buy a house. But just understand that if you do wait, it’s most likley going to cost you more later than it does now and that interest rate can make a big impact.
Sean Young
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