Good Morning,
I was looking back through past Market Update’s this morning to determine the last time we saw interest rates higher than our current climate.
Are you ready for this? July 2nd. Outside of small ups and downs from day to day, mortgage interest rates have essentially held at the same level the bulk of the summer. Okay, so when was the last time they were any lower than this? October 30th 2013.
Here’s why I find this information significant: We are seeing the lowest rates in the mortgage market in nearly a full year. This tells me that we most likely are at the bottom of what we are going to see for the near future, if not in my, hopefully, extremely long lifetime.
Analysts have been predicting rates to take a natural rise for a few years now based on a couple basic items. First the Federal Reserve’s policies will eventually stop buying up the excess supply of Bonds and Mortgage Backed Securities in the market. Two, more of the securities will be created with a recovering housing market. The very simple way of hearing this is, the less demand to buy these on the market drives rates up. The Federal Reserve has almost completely exited on their side of the coin, and with the housing market starting to get the spring jump (sure, a few seasons late) that was predicted, more and more of these will be hitting the market.
That being said, there’s no way to predict how fast or how soon. “Experts” have been trying to predict the future since the dawn of time and for every act of “I told you so” there is an equal act of “Maybe next time”. The educated guess as to how fast is really a little too unpredictable.
My sincere view is that one should not rush into an investment they are not ready for regardless of how affordable homes are currently yet for those who are ready to take the next step or are close to it…this is a great time to become a homeowner.
Have a great week!
Matt
Rates: 30 year fixed at 4.125% (APR 4.205) and the 15 year at 3.375% (APR 3.474), FHA: 3.75% (APR 5.835): As always rates change with individual credit scenarios and programs, APRs are estimated based off of a $250,000 purchase price with 20% down and a 740 credit score, if you want an exact quote, call. These are not quotes, merely a baseline measure to gauge how rates change from week to week.
Matt Royer
Mortgage Consultant, CMC NMLS 366970
Homes Mortgage NMLS 298853
612-232-7646 cell I 651-770-0637 office
www.MattRoyer.com I Apply Now!
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