This week rates hit a 7 year high ending the day as high as 4.875% for the most creditworthy borrowers according to Mortgage News Daily.
This year rates started right around 4% and begin to rise almost immediately. Good economic news showing positive signs in retail suggesting that newly imposed tariffs would not hurt or slow sales as expected has helped tip rates to new highs not seen in 7 years.
Rates have been expected by many to rise as the Federal Reserve raised its lending rate. However the surge in rates is an unwelcoming way to enter the spring and summer housing markets, traditionally the hottest times of the year for housing. As buyers were struggling to find affordable homes, especially in markets like California, where the supply of listings has dropped to new record lows. Regardless home prices have seen the fastest gain within the last 4 years. This may also represent the perfect opportunity for homeowners to leverage their equity to pay off debt, repair the house if needed, or just build a nest egg as we approach a new housing market on our horizon.
Home buying demand has remained optimistic so far this year and practically ignored the higher rate environment, how long will this continue is a question many industry experts have pondered. In addition to things such as higher gas prices a slow down in home buying and price adjustments may be on the horizon. Higher mortgage rates often chill prices, as sellers will likely have to adjust to what buyers can afford in this new rate environment. With supply and demand being such a driving factor, its anyone's guess when this new change will happen. However if rates move past the 5% range on 30 year fixed rate mortgages house prices will have to adjust. It will be an interesting spring and summer. Whats your thoughts, think rates are headed higher or set to drop, we would love to hear your feedback or comments below.
Interested in locking in a low fixed rate or using your homes equity for any reason call Ladera Ranch Home Loans 1-877-353-9527
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