As we sit right now, 30 year fixed mortgage rates sit at levels which put them near two year highs. With that perspective, many potential new homeowners are wondering if they should wait for interest rates to come back down, before buying a new home.
While no one knows for certain exactly what will happen with interest rates, there is definitely a prevailing opinion for higher rates that is echoed by many of the most influential bodies in the mortgage and real estate industries. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are all in agreement that we should see higher interest rates by year end 2013 and in 2014.
With the Federal Reserve set to taper their bond purchases and most probably completely unwind their Quantitative Easing program in 2014, we have already seen rising interest rates in anticipation of this. However, on a historical basis we still have very low interest rates on home mortgages at the moment.
In addition, even though we have seen a large amount of home appreciation in the past 12 months, especially here in Arizona, we are still quite off the high prices we saw during our last real estate bubble in the mid to late 2000′s.
What this means, is that even though it is slightly more expensive to purchase a home this year, as opposed to last, the same may be true next year, as opposed to this year.
As always, it is best to speak to a licensed mortgage lender to specifically answer mortgage questions tailored to your specific situation and to fully pre-qualify for a home purchase if you are looking to purchase a new home.
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