Why Mortgage Rates are Rising

If you are waiting to buy because you think mortgage rates just might drop a little lower, think again. Quite honestly, they were low for so long, it is a wonder they didn’t rise already. The market has become so accustomed to unfavorable economic news pushing the rates down that many people have just taken for granted that they will stay down in that desirable position. Unfortunately, that’s not the way it works.

According to a survey of larger lenders, their 30-year fixed rate mortgages actually rose to 3.91 percent from 3.86 percent. Although a year ago, it was at 4.41 percent, this is the first time in quite a while that it has been able to leap free of that 3.75 percent mark. Even the 15-year fixed-rate mortgages reported in at 3.12 percent on 22 August 2012 from 3.05 percent the week before.

Freddie Says Otherwise

Although these statistics are impressive, they are merely based on a lender survey. The name you really want to listen to is mortgage giant Freddy mac. According to this lender, they reported rates at 4.08 percent and suggest that 4.25 percent will be seen by the end of the year.

The Influence of External Events

Some people do not pay much attention to global events because they feel they don’t directly affect them. If this sounds like you, then you should know that you may not think it affects you, but it does.

U.S. mortgage rates have been affected for the past few months by the euro zone crisis. As this situation is proving to become more stable every day, investor confidence has been created. This has resulted in less demand in what some deem safe U.S treasures.

External events drive interest rates. One small hiccup of negative economic news in the U.S. or talk of disappointing earnings in Europe and you will quickly see mortgage rates and treasury yields go right back down. While this may sound favorable to you, when this happens, it means that the nation as a whole is not thriving.

How Far Will They Rise?

Although rates are on the rise, there is little chance that they will spike; at least not this year. The Federal Reserve always talks about being so dedicated to keeping rates down that they wouldn’t dare let them skyrocket during an election year. They will rise to give potential homebuyers confidence that the market is taking a positive turn, but they won’t rise so far that they will deter people from purchasing. In fact, the Mortgage Bankers Association has suggested that there will be another half-percent increase for the fourth quarter.

Bad News to Come

While people are wrapped up in watching mortgage rates, they may not know that there are new regulations in the making that will increase lender fees. Plus, the government has been passing legislation that will require increased costs to be placed on “affordable” FHA loans and conventional loans. Of course, they are being very quiet about this. If you are considering buying a home or refinancing, now is the time. You will likely be disappointed if you wait much longer.

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About The Author

Joseph Sabeh Jr.

Please let me introduce myself, I am Joseph Sabeh, Jr a full time licensed professional realtor. I have been with Executive Homes Realty for over 13 years and was trained by my late father and Broker, Joseph Sabeh. I recently incorporated the company and we moved the office to 43513 Mission Blvd just last summer. I could not have found a more honorable place to work. After earning my experience selling high end Ralph Lauren suits and studying business management in southern California, I decided to pursue my dream of selling real estate and working with my father. He had already had such an excellent reputation and established a niche market of high end clientele that catered to the very best. I wanted to become the consummate professional just like him and have strived to become just that being just a phone call or email away from getting back to my client’s immediate needs! Known by my clients for my tenacity, perseverance , and excellence in negotia- tion(Certified Negotiation Expert), I have always strived to meet my clients high demands and goals. As a result of my professionalism, I have achieved an extensive portfolio of referrals from past and present clients. I credit my current values from my upbringing of my parents and the credit is due to them without question. Their integrity, pride, and willingness to sacrifice for the better of my life and my sister’s always left a mark on me that one day I will pass on. Their desire to achieve a better life and live it to the fullest is one that some families dream of and I certainly am appreciative of all of the education and etiquette I have learned from them both. I have sold condos up to 3.2 million dollar homes and I am here for any and all of your future real estate needs and wishing you the very best experience in your future real estate endeavors with me.

1 Comment

  1. Comment by Kassie November 16, 2013 @ 5:54 PM

    Wonderful post however I waas wanting to know if you could write a litte more on this topic?
    I’d be very grateful if you could elaborate a little bit more.

    Bless you!

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