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I'm about to apply for a loan but just checked out the rate today and its is crazy high.
What is going on!!!! Any chance of the rate going down soon?????
The rates are on their way up. That is why the houses are finally starting to sell. People are trying to lock in before they go any higher.
The Fed is also likely to end their bond buying spree very soon so there is no chance of rates going down, only up for the foreseeable future. On another note, 5% is crazy high? I thought mortgage rates only dipped to about 4%? Did they go lower than that? On second thought, please don't answer that because we're locked in at 6.125% since we bought in 2008 and don't have much equity
30 yr. mortgage hit an all time low last Nov. at around 3.4%, and just this April, it was about 3.6%. In the span of 3 month, rates jumped 100 basis points, all the more significant coming from such a low base. Rates could go lower from time to time(If Syria really hit the fan and the Russians get involved). Barring such catastrophic events, rates are on the way up. That 3.4% rate was not normal, once in a generation(or multiple generations) kind of thing.
Buyers can use the rising rate to their advantage by trying to get more concessions from the seller, especially as we approach year end. The market has definitely quieted down a lot from the Spring orgy. If you're buying new construction, major home builders are definitely a lot more accommodating.(just look at their stock prices, down 30% YTD, things aren't looking too good and they need to move volume before the holiday season)
^This. Barring another crisis of the magnitude that we just endured you probably won't see rates that low again for 20 years. The market has shown that it can support higher interest rates at current house price levels. I'm guessing rates will spike when the fed sets a definite deadline to end the bond buyback and then plateau between 6%-7% toward the end of next year.
True, but houses then costs 50% of what it cost today. Taxes are much much lower too.
Totally agree. Keep hearing about "well, back in the day, 30 yr rates were 17%, rates are still at historical low, and affordability is high".
The only problem with that statement is that home prices are at historic highs! Further, I bet median household income vs. median home price is likely much lower today than it was "back in the day" Most ppl's buying power/real income has gone done in the last decade. So, low interest rate alone does not make homes affordable.
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