One might assume that as mortgage rates go up home sales go down, but this is not what we’ve seen in the current market. In May of this year pending home sales reached a 6 year high, up 6.7% from the April, and up 12.1% when compared to one year earlier. We’ve seen home sales trend upwards even while seeing mortgage rates start to tick higher. Some buyers might be grabbing up a real estate purchase before rates rise further, but it’s also likely that home affordability and overall confidence in the economy as well as the value of real estate trump a slightly higher cost of financing.
Mortgage Rates Forecast
Currently Trending: Even
We expect to see continued volatility from mortgage rates in the near future. Fed Chair Ben Bernanke’s recent comments indicating that the Federal Reserve plans to begin “tapering” off from the current levels of treasury bond purchases (which has been keeping long term interest rates artificially low) led to a big jump in rates, which then came back down some as the reaction became more moderate. As rates move higher current homeowners may find they have missed the window for a cost saving refinance, and prospective buyers lose some of the purchasing power afforded by a very low cost of financing.??If you are planning a refinance or home purchase in the near future we recommend that you discuss your plans with your mortgage banker here at the Decker Group so that we can closely watch the market with your goals in mind. Give us a call at??(972) 591-3097.
Upcoming Economic Events
Thursday, July 4th: ECP Meeting in Europe
Friday, July 5th: Monthly Unemployment Report, Weekly Jobless Claims Data Released