A Second Wind
Many home buyers live in an unprecedented competitive housing market. Fluctuating mortgage interest rates, amid a median reduction in the number of homes for sale, has caused home prices to rise above unimaginable expectations and rates to fall, providing slight financial relief.
Rates fell slightly due to the significant strengthening of the US economy and unemployment that continued to decline in the last quarter, allowing consumer confidence to increase. This led investors to feel safe enough to move money from traditionally more fixed investments, such as government bonds and mortgages, and put that cash on the stock market, which is generally considered maximum risk. Historically, when there is less demand for mortgage bonds, mortgage rates go up.
Finding a lender who can offer competitive mortgage rates and assist clients with pre-approval becomes added value for current buyers, urgently seeking to qualify for a home loan in record time.
Home prices are rising at the fastest pace in 15 years, driven by historically low mortgage rates, likely to see significant increases from last year’s all-time lows, prompting monthly payments for prospective buyers.
For this reason, buyers should not expect those lower rates to last. As the economy continues to improve, rates will go up. But that does not mean there will not be some volatility with rates fluctuating a bit over the next few months.
The trend is highly likely to be bullish, so current and future buyers should take advantage of this historic moment for US housing.
CEO – BROKER