The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors have each projected that the 30-year fixed rate mortgage will have interest rates in excess of 5% by this time next year. The average of their four projections is 5.3%. The table below shows the impact this will have on the monthly principal and interest payment on a $250,000 mortgage:
A buyer should take advantage of the current window of opportunity before it is too late.
Remember that the Fed has been purchasing $85 billion in Bonds and Treasuries each month to stimulate the economy and housing market via its Quantitative Easing program. The Fed has said that the continuation of these purchases remains dependent on economic data. And recent data shows that the housing sector recovery has slowed in recent months, plus Gross Domestic Product (the broadest measure of economic activity) and employment figures remain weak.
In a recent policy statement, the Fed said it has “decided to await more evidence that progress will be sustained before adjusting the pace of its purchases.”
This should help keep home loan rates attractive through the remainder of 2013.
Although most Naples real estate is purchased with cash (see the graph below), the potenial for higher interest rates still impacts the market.
If you are seeking financing to purchase a Naples home, call, email or text me. A pre-approval is necessary today to make a strong offer on a home.
Alysia Shivers Realtor | Naples Florida Real Estate | 239.877.9732
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