Today all of us in the Real Estate Business, as well as potential buyers are keeping a close eye on the interest rates. We know even a small rise in the interest rate could make a significant difference in your monthly payment. No one can predict what will happen to the rates going forward; however, there are many factors that will have an overall impact on rates to be concerned about.
First, is the economy generally as unemployment goes down, it could mean that higher employment, which simply means more people can afford housing. However, if the jobs are not on the higher end of the salary scale, then it may not influence the housing market. Secondly, consumer confidence, as that grows more buyers enter the market reducing inventories. Thirdly, the overall health of the banking industry and how they loosen up their credit requirements. While all this takes place, the federal Government through the federal reserve bank watches and decides whether to bump up it’s prime rate. The thing to keep in mind for the foreseeable future is at least there is little evidence that interest rates will be dropping.
A simple truth is that over the past fifteen years mortgage rates have been higher when the economy was doing better and since that is the direction in which we appear to be heading. I continue to advise buyers to act now.
