Mortgage Rates Predicted to Decrease: There have been many reports that rates will do the opposite and increase as we head toward the end of the year. However, due to recent events in the last several days it appears this may no longer be the case. Here’s why this seems to be a reality, in a nut shell: for some time now the Feds were indicating that they were going to slow down their purchases of mortgage-backed securities. In anticipation of this event, mortgage rates jumped up several times over the summer. But the latest news is that the Feds are NOT going to taper off on their bond purchases, which means there is no reason to increase mortgage rates; thus, the likely result is that we will see rates drop or not rise – and this will likely be within the next 30 days according to many mortgage professionals.
You may wonder why the sudden change. The rationale is that with the ongoing housing recovery, raising rates may quash all of the healing and continued strong sales numbers that we are seeing – higher rates could lead to fewer buyers. The Feds do not want this to happen. The reduction in Fed monthly asset purchases was predicted to be around $10 billion. If you are a buyer NOW is definitely the time to make that purchase, as this will likely not last for a long period of time.
High Existing Home Sales Numbers: It is official – sales of existing homes are at a 6-year high, according to statistics just released by the National Association of Realtors (NAR). Sales in August rose 1.7%, bringing the total increase to 13.2% year over year for the month. NAR warned that inventory levels still prove challenging in many areas, and that the high prices may be a temporary peak. They surmise that the rising interest rates may have pushed more buyers to close deals in August.
Qualifying for Loans Will Get Harder Come January: Beginning in January of 2014 it will be harder for many buyers to qualify for loans, as investors will have to be tougher on qualifying ratios due to stricter underwriting guidelines that take effect January 1. If you are a buyer please speak with your qualified mortgage professional to see how this may effect you, and to get more information.
All in all things in the housing market will likely continue to improve. Inventory is still on the low side, but with mortgage rates staying put or even decreasing buyers will have more buying power. My suggestion is to consider purchasing now, before the end of the year, if you are in the market to do so. Things may change after we head into 2014. Consult with your local experienced real estate agent or broker to discuss your individual market, and get informed so you can make smart choices.