Freddie Mac: Doubtful Rates Will Return to Recent Lows

"One thing seems certain: we aren't likely to see average 30-year fixed mortgage rates return to the historic lows experienced in 2012."

– Freddie Mac,  March 24, 2014

There are those that hope that 30-year mortgage interest rates will head back under 4%. Obviously, for any prospective home purchaser that would be great news. However, there is probably a greater chance that interest rates will return to the greater than 6% rate of the last decade before they would return to the less than 3.5% rate of 2012.

Freddie Mac, in one of four original posts on their new blog, explained that current rates are still extremely low compared to historic averages:

"The all-time record low – since Freddie Mac began tracking mortgage rates in 1971 – was 3.31% in November 2012. Conversely, the all-time record high occurred in October of 1981, hitting 18.63%. That's more than four times higher than today's average 30-year fixed rate of 4.32% as of March 20…rates hovering around 4.5% may be high relative to last year, but something to celebrate compared to almost any year since 1971."

If you are thinking of buying a home, waiting for a dramatic decrease in mortgage rates might not make sense. Give us a call or text today and let us help you find your new home, we will guide you every step of the way.

Posted on March 26, 2014 at 1:21 pm
Steve Hill and Sandra Brenner | Category: Real Estate | Tagged , , , , , , , , , , , ,

When Will Mortgage Rates Hit 5%?

The big question for homebuyers is when interest rates will begin to rise to the 5% mark. The effect of a rise in mortgage rates could be a dramatic increase in the monthly mortgage payment when purchasing a home. In an article last week, HousingWire quoted two different sources regarding this issue.

Most experts are projecting that rates will rise when the Fed decides to taper the purchase of bonds which has acted as a stimulus to the housing market by keeping long term mortgage rates at historic lows.

In the article, Sterne Agee’s managing director and chief economist Lindsey Piegza pointed out:

"Federal Reserve officials said they might reduce their monthly bond buying program from $85 billion 'in coming months' as the economy continues to improve."

The article also quotes Frank Nothaft, chief economist with Freddie Mac:

“By the end of 2014, rates will probably approach and perhaps touch 5%. A reason we see the uptick in rates is that I do think some point the Federal Reserve will start to taper and scale back its very active purchase on long-term Treasuries and mortgage-backed securities.”

Rates will hit 5% sometime in 2014. It might be better to buy sooner rather than later.

Why not buy now?  Buyer competion for homes during the holidays, combined with great interest rates make it a great time to buy!

If you are considering a home purchase, give us a call, text or email. Let us negotiate the best price for your new home!

?-Steve and Sandra

Steve Hill and Sandra Brenner
Windermere Real Estate/FN
Seattle-Northwest
122502 Greenwood Ave N
Seattle WA 98133
call/text: 206-769-9577
email: stevehill@windermere.com

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Posted on November 30, 2013 at 3:00 pm
Steve Hill and Sandra Brenner | Category: Interest and Mortgage Rates | Tagged , , , , , , , , , , , ,

Housing Forcaset

The infographic below shows Fannie Mae's housing forecast as of August 2013. Home sales, prices and mortgage rates are all expected to rise.

When do you think it will be a good time to buy?

If you are considering a first time or move up home purchase, give us a call, we are eager to expalin to you the benefits of homeownership.

Steve Hill and Sandra Brenner
Best In Client Satisfation
Windermere Real Estate
BrennerHill.com
206-769-9577

Fannie Mae 3

Posted on September 6, 2013 at 3:00 pm
Steve Hill and Sandra Brenner | Category: Fannnie Mae Housing Forecast | Tagged , , , , , , , , ,

As Interest Rates Rise, So do Home Prices

It may seem counterintuitive, but historically, as interest rates rise, so do homes prices. Check out the graph below. Every dramatic mortgage increase has also given rise to home prices. Waiting to buy will cost more than an increase in interest rates, the home will cost more too.

 

 

 

 

 

 

 

 

 


Steve Hill and Sandra Brenner
Best In Client Satisfaction
Windermere Real Estate
BrennerHill.com
call/text 206-769-9577

Posted on September 5, 2013 at 3:00 pm
Steve Hill and Sandra Brenner | Category: Real Estate Prices and Mortgage Rates | Tagged , , , , , ,

Buying a House? 3 Reasons to Do it Now!

Address

Here are three great reasons to consider buying a home today instead of waiting.

1.) Prices Will Continue to Rise

Standard & Poors recently upgraded their 2013 forecast for the S&P/Case-Shiller Home Price Index to an 11% year-over-year increase from their original 8% projection.

The Home Price Expectation Survey, which polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts, projects a 22.3% appreciation in home values over the next five years. The bottom in home prices has passed. Waiting no longer makes sense.

2.) Mortgage Interest Rates Are Increasing

As reported by Freddie Mac, interest rates for 30-year fixed-rate mortgages have risen about 1/2 percentage point over the past several weeks.

The National Association of Realtors, the Mortgage Bankers Association and Fannie Mae are calling for interest rates to rise by approximately an additional ½ percentage point by this time next year. Some are trying to minimize the impact of higher rates. For example, Freddie Mac in their June U.S. Economic and Housing Market Outlook stated:

“At today’s house prices and income levels, mortgage rates would have to be nearly 7 percent before the U.S. median priced home would be unaffordable to a family making the median income in most parts of the country.”

However, an increase in rates will impact YOUR monthly mortgage payment. Whether you are moving up or moving down, your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.

3.) It’s Time to Move On with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise. But, what if they weren’t? Would you wait?

Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your  family to be safer or you just want to have control over renovations, maybe it is time to buy.

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

Consifering Buying a Home? Give us a call, we can help you find the perfect home.

Steve Hill and Sadnra Brenner
Windermere Real Estate Seattle Northwest
12550 Greenwood Ave N
Seattle WA 98133
206-769-9577

Posted on June 28, 2013 at 11:00 am
Steve Hill and Sandra Brenner | Category: Home Buying | Tagged , , , , ,

Buy or Rent: Which Makes More Sense Financially?

rent buyEvery potential home buyer has to stop for at least a moment and consider this question. Today, we want to look at one of the many financial reasons to buy instead of rent: the housing expense moving forward.

According to the latest Existing Home Sales Report from the National Association of Realtors, the median sales price of a home in the U.S. is $184,300. The mortgage payment (principal & interest) on that purchase would be $661.89 assuming a 20% down payment and a 3.5% mortgage interest rate. Currently, the median asking rent in the U.S. according to the Census Bureau is $717 a month.

We realize that the two payments do not necessarily reflect the housing cost on a similar residence. However, that is not the point of the post. All we are saying is that the monthly housing expense on a median price home is $661.89 and the median rent is $717. We now want to discuss what will happen to these costs over time.

The principal and interest portion of the mortgage payment is locked in for the next 30 years. We know real estate taxes may be included in the payment and will increase to some degree over that time. We also acknowledge that the homeowner will have occasion to spend money on repairs. They also receive many tax advantages as a homeowner.

However, the actual monthly housing expense remains the same for the next 30 years.

Now, let’s look at what happens to a rent payment. The best thing to do to predict the future is to study the past. Here is a graph of the median asking rent since 1988 based on Census Bureau data:

 Rents

We believe rents will follow their historically pattern and increase dramatically over the next 30 years. Buyers have a choice: either lock in your housing expense or deal with the uncertainty of rental increases.

Posted on June 5, 2013 at 8:00 pm
Steve Hill and Sandra Brenner | Category: Buy or Rent? | Tagged , , , , , ,