Here's an intriguing take on the
current rise in Home Interest Rates.
Interest rates for a 30-year fixed
rate mortgage have climbed from 3.95% in the first week of January up to 4.61%
last week, which marks a 7-year high according
to Freddie Mac. The current pace of acceleration has been fueled by many
factors.
Sam Khater, Freddie Mac’s Chief
Economist, had this to say:
“Healthy consumer spending and higher
commodity prices spooked bond markets and led to higher mortgage rates over the
past week.
Not only are buyers facing higher
borrowing costs, gas prices are currently at four-year highs just as we enter
the important peak home sales season.”
But
what do gas prices have to do with interest rates?
“The price of oil and inflation are often seen as being connected in a cause-and-effect relationship. As oil prices move up or down, inflation follows in the same direction.”
You may have noticed that filling your gas tank has become substantially more expensive in recent months. The average national gas price has climbed nearly $0.50 from the beginning of the year, leading to the highest price for Memorial Day weekend since 2014.
As rates go up, your purchasing power goes down, but don’t worry; rates are still well below the averages we’ve seen over the last four decades.
“Freddie Mac said this year’s higher
rates have not yet caused much of a ripple in the strong demand levels for
buying a home seen in most markets, but inflationary pressures and the prospect
of rates approaching 5 percent could begin to hit the psyche of some
prospective buyers.”
Buying sooner rather than later will
help lock in a lower rate than waiting, as the experts believe rates will
continue to climb. Even a small increase in interest rates can have a big
impact on your monthly housing cost.
To
Sum Up:
If you are planning on buying a home
this year, keep an eye on gas prices the next time you’re at the pump. If you
start to feel a big jump in price, know that rates are probably on their way
up, too. Or, better yet, call me. I have all the contacts, tools and info you
need to making buying or selling your home easy.
Elizabeth Scott, Realtor®, Broker
Diamond Award – High Sales Volume
e-PRO, Strategic Pricing Specialist
Fathom
Realty NC, LLC
Phone: 919.306.9699
Phone: 919.306.9699
