The last month there have been fewer Buyers in the market and we feel one of the reasons for this is the recent increases in mortgage rates. As the chart to the left shows we’ve picked up about 1% in rate since the beginning of summer.
The good news, at least for the short-term, is that the Federal Reserve decided not to taper off their $85 million a month purchases of mortgage-backed securities and treasury bonds – which has been keeping mortgage rates artificially low for the last few years. They are going to review the economy monthly and at some point will begin to taper off their purchases – which will cause rates to begin to increase again.
What does this mean for buyers and sellers? Right now, and for the next month, rates are likely to be as low as they are going to be. 4.5% for a 30yr fixed mortgage is still a gift when looking at historical rates, and as the economy continues to improve and the Fed does start to taper their purchases, it won’t be around for long. Buyers can save money over the long haul by acting now, and there will never be more qualified potential buyers for someone listing their home than there are right now.
We expect the market to heat up for the next couple of months as this plays out – now’s a great time to get out there and buy or sell a home. Call me and we’ll go over your options!