Although Mortgage Rates Are Up, The Housing Market Is Recovering
Although 30-year mortgage interest rates were up this week, they are still historically low. According to Freddie Mac, mortgage rates rose from 4.31% to 4.39% this week, and have jumped an entire percentage point since May. Rates have spiked since June when the Fed made reference to the easing of QE3. However, the Fed has recently stated that they may hold off because the economy is still not thriving.
Despite rates being on the rise, for those who qualify, interest rates are still extremely low. These low rates are helping the housing market begin to pick up speed, and the demand for homes is driving up housing prices. As rates have risen in the last few months the mortgage market has fluctuated from refinances to purchases.
Now is a great time to buy a home. It is important to note as a potential home buyer that as interest rates increase you buying power decreases. For every percentage point that interest rates increase, your purchasing power decreases by roughly ten percent. If you are on the fence about buying a home it’s time to get off. The housing market is recovering, and as it picks up pace home affordability will do down. If you are making the decision to buy a home contact United Home Loans, a qualified mortgage banker will be more than willing to help find a mortgage program to best suit your needs.