Where are mortgage rates going? 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.
So far rising rates have not affected Omaha real estate according to this report from KMTV 3 News: “The real estate market in the Omaha metro is heating up and is not expected to slow down anytime soon.”
“The Federal Reserve says Nebraska’s real estate market has grown at the sixth highest rate in the country and over the last decade, Nebraska home prices have risen 26 percent. In the last five years, the median home prices in Nebraska have increased by about 30 percent across all price points.“
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.
If you are a potential homebuyer, you might want to buy a house while interest rates are low.
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?”
As investors, we are in business to make a modest profit on any deal. However, we can help homeowners out of just about any situation, no matter what! There are no fees, upfront costs, commissions, or anything else. We offer the simple truth about your home and how we can help you sell it fast.
Give us a ring. We would be more than happy to help you understand the process and to get all of your questions answered.
You can reach us at 402 999.0577.