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Home Interest Rates

There has been a lot of talk lately about interest rates. The FED after months and months and months of talking increased the short-term rate by 1/4 pt yesterday. You may naturally think that would increase mortgage interest rates, however, the two aren’t directly related.

Since Donald Trump was elected as President, the market has responded favorably to his election. Due to this, mortgage rates have increased steadily since Nov 6th. As you can see by the attached graphs, mortgage rates on a 30-yr fixed have increased by .75% since then.

If you started your search for a home back in the middle of October and still have not found a home and you did not lock in your rate, it is a good idea to speak with your loan officer again because your max approval amount most definitely has changed. In addition, if you were aiming for a specific monthly payment in a specific price range, that range, and payment has also most definitely changed.

On average a person who is aiming to buy a $200k home would have seen his or her payment increase by $85. So if someone is really tight on his or her debt to income ratio, this could dramatically affect what you are able to afford.

Rates are still historically low when compared to 20-year charts. However what once was is no longer. Buying a home is now slightly more expensive than it was.

How does this affect a seller? Simply put, your home may decrease slightly in value as it becomes more expensive to purchase your home at its current price. Those who desired to buy a $200k home in October most likely have been moved down about $20k in the price range. However, those who were looking in the $220k range may now be looking at your home. The higher in price you go, the fewer people who are looking in that price range.

Rates are predicted to stabilize around 4.75% over the next 9-12 months. This means that your home’s attractiveness may change next season. You can really never predict with certainty what will happen, however, I do believe the market will remain very active for the foreseeable future.

#Sell901 #TheMillennialAgent