Over the past month or so we have seen interest rates move up and down a little more than they had been. There is a lot more volatility in the market lately.
Interest rates have increased slightly however they are still very low! With some of the economic reports on employment and overall improved economy, interest rates have started to climb. The biggest question is when the Fed will stop their quanitative easing program. Fed Chairman Ben Bernanke spoke this week and said they would not stop the program anytime soon. But later in his testimony to Congress, he did state it would end sooner than they had expected. As soon as he said that, the bond market reacted and several banks did re-price mortgage rates higher.
As we see positive economic reports, the mortgage market responds quickly with interest rates increasing. However, when we see reports that are showing slowing growth or employment, the market doesn't respond the same way! Rates have dropped with negative reports, but not to the same extent that they have increased.
With home prices starting to increase and interest rates also starting to increase, it is definitely the best time to be looking. You will be able to buy more home now than you will in the future. Right now the housing inventory is lower than it has been so there are more mulitple offers and that is driving prices up. This means it is a better time to sell and definitely a good time to buy as I don't expect prices to drop again - but you never know!
If you are thinking about buying a new home, now is a great time to be looking. Just make sure you have patience!! More homes are coming on the market, but they are also going quicker than they have been!
We don't know quickly interest rates will climb, but unless we see a significant amount of bad news on the economy, interest rates will slowly keep climbing. No one can tell us how much and how fast - but I do expect they will slowly climb. The bottom line is you can qualify for more home now than you will be able to in the future!
