Qualified home buyers can still get an incredible rate on a home loan mortgage, but weren’t they supposed to jump?
Sometimes the finance world can be tricky business. In most cases, it’s not about the money on hand, it’s about the money that might be made. With that regard, many finance experts make their living (and a good one at that!) forecasting the financial market. Think of Fritz Coleman. Only instead of telling you it might rain tomorrow, he tells you that mortgage interest rates are going up.
Well, interestingly enough, many forecasters predicted mortgage rates would jump to over 5 percent by 2014 and yet, they have remained steadily just below 4 1/2 percent.
So why DID financial experts predict a rise in mortgage rates?
Don’t be fooled. Oftentimes financial experts are fairly correct in their predictions about the money and mortgage markets. They take into account not only what’s happening in the real estate market, but the national and international financial markets as well. In this day and age, it’s all integral and relevant to any asset that may increase (or decrease) in value, such as real estate.
Earlier this year, interest rates did rise. They jumped nearly 1 percent on the news that the Federal Reserve may slow the stimulus that guarantees Mortgage Backed Securities (MBS). Some investors went into panic mode and sold off, which in turn caused rates to jump. However, since the Summer of 2013, rates have been pretty steady, rising or falling within a tenth of a point or so of 4.5 percent. The Fed backed off their claim, and the stimulus resumed without any reduction of investment from the government.
In late 2013, the Federal Reserve once again made an announcement they would be cutting MBS stimulus based on our improving economy, and they actually made good. A $10 billion dollar per month cut took place in January, with another $10 billion reduction about a month later. Investors assumed that these actions would trigger another selloff, but so far, the economy has held steady, as have mortgage rates.
What does this mean to home buyers and sellers?
This is good news for both home buyers and sellers. For buyers, its obvious: Lower mortgage rates means more purchasing power. For sellers, it means that buyers are still out there looking for homes to move into. With home prices still on the rise, it’s a great time to get top dollar for your property.
Ready to buy or sell a home? Contact Team Avalos with your questions about the real estate market. We’ll show you how easy it is to purchase a home. If you’re selling, we’ll show you our plan to get your home sold fast at top dollar!
Team Avalos Real Estate
Keller Williams VIP Properties
25124 Springfield Court, Suite 100
Valencia, CA 91355
Office: (661) 290-3743
Carlos direct: (818) 399-4093
Rose direct: (818) 590-2077