Real Estate Insider Blog
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Under a federal funds rate increase of 1.25 - 1.50 points, mortgage rates are expected to increase. Hovering around 4%, mortgage rates are projected to inch up slightly, towards 5%, under the new federal interest rates. Rising mortgage rates impact every aspect of buying and selling a home and should be closely monitored by all housing market participants.
Generally indicating a stronger economy, a federal interest rate hike suggests confidence in the economy and a need for higher rates to maintain market competitively. From a home buyer's perspective, as interest rates rise, affordability decreases. For example, a buyer who qualifies for a $400,000 mortgage at 4% interest will only qualify for a $355,000 loan at 5% interest. An increase in mortgage interest lowers purchasing power.
Buying a home under the current mortgage interest rates is the best way to maximize purchasing power and lock in lower monthly payments (assuming a fixed-rate mortgage). When the economy is expected to grow and is indicated to be in good health via a federal interest rate hike, the best time to participate in the housing market as a buyer is now. Benefit from the historically low mortgage interest rates and lock in a rate under 5% now.
Impacting sellers in a slightly different way, rising interest rates drive down housing prices and lower property values. For example, a seller can choose to list a house at $400,000, but rising rates may...
Home prices in Tampa Bay are continuing to rise and prices are surging even higher in Pinellas County. The real estate market continues to provide home sellers and buyers with outstanding conditions and encouraging even more attention from surrounding areas. Tampa Bay saw the highest increase out of ALL Florida metro areas with an impressive 20% jump in the month of August whereas Pinellas County soared even higher according to the Tampa Bay Times.
Breaking Down the Numbers
The number of homes sold in June was about the same as the same time in June of 2015. This means that inventory, overall is low. For those who are planning on selling a home right now, that's good news. Home values are on the way up as a direct result of limited inventory. For those planning to buy right now, it’s not a good time to “sit on the fence” and interest rates are already predicted to increase after the election. Anyone schooled in basic economics understand “supply and demand” and right now there are more buyers in the market right now than sellers – this is a key reason you'll want to take action quickly and work closely with a local real estate agent like Christopher Milson. Be sure to you seize the opportunity before the train leaves the station and you end up paying way more than you should have.
When it comes down to location, here are some key facts:
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