Mortgage Rates On The Rise....Again!I hope you have been reading through the past months as I have tried my best to prepare you and everyone else for what is happening in the market. Today will
This Is Getting Serious 📈
Dated: May 4 2022
Mortgage Rates On The Rise....Again!
I hope you have been reading through the past months as I have tried my best to prepare you and everyone else for what is happening in the market.
Today will be a big day for interest rates as the Fed is set to announce today at 2pm (will have already happened by the time you're reading this) another rate increase. This announcement will hopefully contain no surprises, but we should anticipate another 50 basis point increase (0.5% interest rate).
The Fed has announced earlier this year that they would continue to increase rates by 50 basis points throughout the remainder of the year. With that in mind, we will be on track to be somewhere near 7% to 8% for a 30 year fixed mortgage.
There are a few ways to look at this: First, compared to historical numbers and especially the 1980's when rates were well into the teens, these rates will still be relatively low. Second (if you are a glass half empty type of person), you will be kicking yourself that you didn't buy over the last few years when rates were at HISTORIC lows. Either way you view it, rates are going up from what we've been accustomed to recently.
My take: This is healthy for the real estate market. Prices have been increasing at such a rapid pace that a cooling is needed. This will hopefully, in theory, slow price growth to a "more normal" 5%-7% price appreciation year to year. What we should watch for is that these interest rate increases may actually flatten the number to no growth or even worse, negative in some parts of the country. I do not see home values going down this year or next. All in all, it's still a great time to be in the market right now if you are a buyer or seller. Buyers are facing a tough uphill battle still with the amount of competition but it will soon slow at the cost of higher mortgage rates.
If you would like to read the most recent Federal Reserve news and press releases, check them out here: https://www.federalreserve.gov/newsevents.htm
My name is Jeff. I'm a real estate professional in Metro Detroit. More importantly, though, I am just a guy who enjoys building meaningful relationships, both in business and in life. I have a bac....