Today, mortgage broker Stephen Stork answers: How have interest rates fluctuated this year?
Rates have made several attempts to move into higher territory. Whether it was the slower than expected first quarter in the U.S., global economic concerns, or the Greek crisis, those increases were put on hold, and interest rates were brought back down.
What are your expectations on the direction of interest rates towards the end of this year and into next year? As we move through the end of this year, we’ll see a lot of the same trends, meaning there won’t be a real increase in rates. The Federal Reserve, which is meeting on December 15th, could increase rates by the end of this year, but most economists predict the first rate increase won’t come until 2016. The first increase shouldn’t impact the consumer right away. However, the Fed’s goal is to add incremental rate increases at each meeting.
Where does the thirty-year fixed rate end up once the Federal Reserve is successful in implementing a plan?
We would move from the low fours to low mid fives by the end of next year. With home values on the rise, a 5 percent interest rate will significantly impact buyer’s affordability. Let’s say you’re buying a home now and you qualify to borrow $200,000. Once the rates increase, you could only qualify for $150,000 or $175,000.
If you’ve been thinking about buying a home, take advantage of these low rates now! If you have any questions for Stephen, you can call him at (248) 755-3701. As always, if you have any questions about real estate, give us a call or send us an email. We look forward to speaking with you!