Mortgage Rates Moving Higher

Mortgage Rates Moving Higher

Mortgage rates moving higher! According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average climbed to 4.6 percent, its highest level in nearly two months. It was 4.54 percent a week ago and 3.93 percent a year ago.

The 15-year fixed-rate average grew to 4.08 percent. It was 4.02 percent a week ago and 3.18 percent a year ago. The five-year adjustable rate average rose to 3.93 percent. It was 3.87 percent a week ago and 3.15 percent a year ago.

When the Federal Reserve met earlier this week, it did not raise interest rates, but it did signal a September hike was likely. The central bank has raised its benchmark rate twice this year and indicated that two more increases are possible before the end of the year.

Mortgage Rates Moving Higher

The Fed doesn’t set mortgage rates, but its decisions influence them. A better indicator of where rates are headed is the movement of long-term bonds. This week, the yield on the 10-year Treasury crossed the 3 percent threshold. It hadn’t closed at 3 percent since late May. When yields rise, so do home loan rates.

It is hard to see how the United States can raise interest rates too much. The U.S. has a debt of over $21 Trillion and this year at an average of 2.23% interest and will pay over $500 billion in interest. The debt is increasing at over $1 Trillion a year and doubling of interest rates to over 4% would mean interest payments of at least $1 Trillion a year. That is not affordable!

On the other hand, inflation is picking up. The usual remedy for inflation is for the Federal Reserve to raise interest rates to cool things down. That means higher rates.

Buyer or Seller?

If you are a potential homebuyer, you might want to buy a house while interest rates are low. Virginia Beach is already one of the top ten cheapest areas of the country. 10 cities picked by Realtor.com give hope to those wanting to live in a beach town. The most affordable beach town in the country, Realtor.com found, was Gulfport, Mississippi. With a median home list price of $184,100. In the top ten was #8 Virginia Beach, Virginia with a median home list price of ($273,200)

If you have been waiting to sell, maybe now is the time. Higher interest rates could slow the economy and bring on a recession causing home prices to come down. Just this week Dr. Housing Bubble had this headline: ”The housing market is now entering a visible slowdown – affordability challenges, low inventory, and higher interest rates are now coming home to roost.

He concludes, “The housing market has been running on fumes and has been in the tailwind of an incredible stock market recovery.  People would like to buy but simply do not have the budget to do so.  You also see foreign money soften up a bit as the current administration has been tough on China.”

“The market is slowing down.  The question yet to be seen is whether this will be a minor correction or an actual bust. We’ve clearly been in a boom.  What comes next?”

Ask now for our FREE information about How to Sell Your House Fast.

I am Christian Dunlap and my company, ChristianBuysHouses.com, buys houses all across Hampton Roads, including Virginia Beach, Norfolk, Chesapeake and Portsmouth.

Give me a call today at 757-705-8812, and I will do my best to provide you with the fastest and fairest home selling solution you need.

Christian Dunlap

I am a family man with four kids and one heck of a beautiful wife. For work, I'm one of those, "We buy houses" guys, which basically means I buy houses for cash through out Hampton Roads, fix them up and then resell them. It's a very rewarding career that affords me to the opportunity to meet and help out people from every walk of life.

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