The cost of the money you borrow to buy a home is far greater than the price you pay for the home. Don’t wait to hold out for a so called “good deal” because the end result could be that your good deal can go very badly with interest rates on the rise. The question remaining is not if they will rise but when. The Fed just took the first steps they need to in order to raise rates.
For people who are in the process of buying a house, our best advice is to lock in your rate now. “This is the last call before the bar closes at these historically low levels,” saidJonathan Smoke, chief economist at realtor.com®.
Currently, rates are low, but they are expected to rise. On Wednesday the Federal Reserve issued its first warning that rates will increase in the near term, because the economy has stabilized. The Fed has been propping up the economy by keeping rates at zero since late 2008, when the housing market collapsed. Now that employment is up, gas prices are low, and consumers are feeling more confident about the future, interest rates are sure to rise. Observers expect the Fed action to happen as early as June.
“From here, rates should go up more than down, which means affordability declines rapidly,” Smoke said. “It also means that navigating mortgage choices becomes simultaneously more important , but also more complex as higher rates would cause qualifications to be harder and some options will fall off the table.”
It goes to reason that as interest rates increase, affordability decreases. Home prices are rising and now that rates are indicated to follow suit, your buying power will not be as great as it once was. These are the waning days of remarkably low rates.
According to the Freddie Mac Primary Mortgage Market Survey:
- 30-year fixed-rate mortgage averaged 3.78%, down from last week when it averaged 3.86%. A year ago at this time, it averaged 4.32%.
- 15-year FRM this week averaged 3.06%, down from 3.1% last week and 3.32% last year at this time.
- 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 2.97%, down from last week when it averaged 3.01%. It averaged 3.02% last year this time.
- 1-year Treasury-indexed ARM averaged 2.46%, unchanged from last week. At this time last year, it averaged 2.49%.
I hope you found this information helpful if you are considering selling or buying a house in the Southern Bergen County NJ area.
The opinions expressed here within are my own completely independent of BHGRE Coccia Realty and its owners and subsidiaries.
If you have any questions or wish to meet me for a Real Estate consultation please contact me as my information is below.
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Raymond Ciampaglia, Realtor®
Email : ray@
Realtor Profile: http://njray.realtor
Better Homes and Gardens Real Estate | Coccia Realty
424 Valley Brook Ave | Lyndhurst, NJ 07071
Office: (201)939-8900 | Fax: (201)939-8910
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