Mortgage Rates Continue to Climb
Ever since the election was decided and Donald Trump was named president-elect, mortgage rates have steadily increased. This week, rates reached a 10-month peak at 3.94 percent for the average 30-year fixed mortgage. Bloomberg reports that the average 15-year fixed rate has gone up significantly as well. Now at 3.14 percent, the average sits 0.26 percent higher than it did just a week ago.
What to Expect Moving Forward
With the news of the latest data concerning mortgage rates, refinancing is expected to slow in response, according to Nerd Wallet. Applications have already dropped by 11 percent in the past week, and experts report that activity will likely continue to decelerate — especially with the likelihood that interest rates may rise in the near future. A number which will also likely rise is the number of applications submitted for adjustable-rate mortgages. Homeowners may consider this loan to be a better option as mortgage rates continue to rise.
What This Means for the Market
Concerns over the uncertainty that the market holds right now has also been expressed by experts. As the president-elect lays out further plans for the economy and housing, we will gain a clearer picture of how the market will respond to the new leadership. For now, the costs of taking out a loan in a market where home prices are also climbing, may deter some buyers from taking the plunge. However, if the economy does strengthen as it is expected to and the Federal Reserve shares promising plans for future policy at its meeting in December, lending standards should settle in the coming months.
With the vast amount of unpredictability in both the lending and real estate markets right now, the guidance of a knowledgeable South Florida real estate professional is absolutely essential. To learn more about the changes in the market, call our office to speak to a member of our team today.