You have surfaced from the recession and just when you thought you were in the clear; interest rates are ticking up! You may be wondering what do rising mortgage rates mean for housing recovery? Rising rates are positive sign of our recovering economy.
It is hard for the Fed to keep rates low against a rising tide of market expectation. The Fed’s actions to keep interest rates low have worked for a time, but eventually, market forces will take over.
The market has recently become more influential, and the Fed can do little to counteract the trend. Average mortgage rates are over 4% on a 30-year fixed-rate loan; if this number seems high compared to the lowest that rates were, historically rates have been over 14%! So an average of over 4, seems OK.
At this time, courage is required. The time has come to put our skepticism aside and make a brave investment in housing, for some for the first time… or even more frightening for others, once again.
The climbing rates (nicely married with climbing home values) encourage people that have been contemplating buying a home, to finally pull the trigger. It’s a good idea to do so before the rates increase any further! What is that saying? Get it while the getting is good? The need to take advantage of the lower rates now, has made the housing market very attractive.
Can you imagine locking in a nice low rate for 30 whole years? No matter what happens to the housing market or the economy you’ll still have your low rate. There is a very good chance that rates won’t be this low again for a long, long time.
The recovery of our economy has created a positive cycle. Small incremental rises of mortgage rates will not hinder it- with more jobs, comes more income, which allows for more buyers in the market. There is more demand for houses, which can create more jobs to take care of demand for more houses… and so on and so on.
Signs that the U.S. economy is improving are evident. Extremely high rates are not likely in the near future. A plethora of factors can be attributed to our recovering housing market. If rising rates are a good indicator that more jobs, income, and ultimately more confidence in spending is upon us, then a little uptick in rates isn’t so bad!
Waiting during rising rates can have a cost. Lock in your historic low rate while you still can. It’s nearly perfect a time to buy a home. It’s still a great time to refinance, with rising values you may qualify now if you were turned down before. The new FHA back to work program allows you to get approved even if you have had financial trouble in the past.
The combination of higher rates and prices can make what’s affordable today out of reach tomorrow.