Interest rates on home mortgages leapt up an entire percentage in just a few short weeks.
Every business news channel said it will kill the newly emerging home sales market.
As someone who has been a Real Estate Broker for over 30 years, I have to laugh at that.
In fact when I first got my license interest rates were 18-19%.
Many sellers held paper so buyers could afford to buy.
Then closing costs went through the roof when interest rates started coming down, seems banks got a bit spoiled.
From my perspective, interest rates below 10% are favorable.
So current rates of 4.5% are still a bargain.
But people hate change, and in particular – people hate change that comes too quickly.
Fixed mortgage rates of 4.5% ARE a bargain but rising an entire point in just a few weeks was simply unnecessarily hasty.
Combining favorable rates, along with current prices, make for one of the best times in history to buy real estate.
New home sales are up, pending home sales are up, both year over year and
Inventory levels are down, which combined signals one thing for sure…
price will and have been on the rise.
The National Association of Realtors published their June report on pending home sales.
The index dropped 0.4% to 110.9% from May, which was just revised to 111.3.
The important statistic though, is June 2013 is 10.9% higher from June 2012.
Tons of media pointed fingers at interest rates – maybe the too hasty jump a point may have made some take pause, but most are using the future trajectory of interest rates to act now. Maybe the slight 0.4% month over month dip is more relative to inventories at historic lows or possibly a saturation plateau.
So, are you in?