Mortgage Rates Move Higher, Again (30 year fixed, rate, properties, closing)
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Since May, mortgage rates for a 30 year fixed have risen from about 3.5% to about 5% today. For people considering buying a new home, will this rise make you less likely to buy or are rates at 5% still low enough?
My friend is now looking for a home since he is concerned that the rates will keep going up. Mortgage applications have been down % wise since the rates started creeping up in early May from the reports I read. I am curious what will happen with home prices in the next 12 months. I think the people who were holding out are now in a position where they have to pull the plug. I also think that with these rates, a lot of people cant afford a house they could have just two months ago. Im so relieved I locked in when I did.
I've been looking, but this combined with some other factors has probably caused me to stop. One other main factor being that the areas I've been looking in (certain Brooklyn neighborhoods) are ridiculously competitive right now with extremely low inventory. I've had to stand outside on the sidewalk waiting for 10-15 min just to get in to see an open house because there was already a long line of people waiting. I was outbid on one apartment - offered over the ask & was told my offer was way off the mark. Other properties have multiple back-up offers - some from people who have all cash. It also doesn't help that I have a few holdings in metals, which have decreased considerably over the last month or so. So I guess mortgage rates climbing + metals declining + low housing inventory have combined to the perfect trifecta to keep me from buying.
It seems almost overnight the switch was flipped from a seller's market, to a maybe, buyer's market. If you noticed my double hesitancy it's because I did see about 80% of my working buyers drop out, but my sellers (that are going onto buying after they get a contract) firmly believe it's still a seller's market and don't understand why the offers don't mirror those of their neighbors.
My crystal ball says the only thing that has changed in the last 30 days is Bernanke opened his mouth. The markets are already starting to digest Obamacare and QM.....come January, if the unemployment has continued to improve, I'll revise my opinion. But right now, I do believe we will come drop back to the low to mid 4's, but probably not for another 30 days.
I've been looking, but this combined with some other factors has probably caused me to stop. One other main factor being that the areas I've been looking in (certain Brooklyn neighborhoods) are ridiculously competitive right now with extremely low inventory. I've had to stand outside on the sidewalk waiting for 10-15 min just to get in to see an open house because there was already a long line of people waiting. I was outbid on one apartment - offered over the ask & was told my offer was way off the mark. Other properties have multiple back-up offers - some from people who have all cash. It also doesn't help that I have a few holdings in metals, which have decreased considerably over the last month or so. So I guess mortgage rates climbing + metals declining + low housing inventory have combined to the perfect trifecta to keep me from buying.
Lots of "hot" areas across the country are extremely susceptible to going from "over heated" directly into "melt down"...
Rates are about to drop. All the news sites are reporting this morning that Bernanke said that the stimulus of bond buying will continue even after unemployment reaches 6.5%. So for the forseeable future expect to see rates start to drop.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.