Mortgage interest rates as we know have been so low that the only direction they can go in is up. The Federal Reserve has keep these rates low to help the economy make a comeback. All indicators that the economists follow, show that our economy is headed in the right direction – up. What that means is once the economy is strong, the need to stimulus programs will ease up.

How much will interest rates rise is a good question. The most recent announcement is that the rates will remain in the 4% to 5% range for at least another year, and we can expect a rise late 2014 or early 2015. Even if the rates go to 6% that is still a good rate. All this means for home buyers is if you have been waiting for rates to go down, that will probably not be the case and with home prices on the rise it is time to make a decision to purchase a home probably within the next year.

For home sellers with every uptick in interest rates, buyers disappear as they are no longer eligible to qualify for the higher rate. As less buyers are in the market, appreciation in home prices slow down. So as a seller if you are thinking about selling this may be the time before we start to see an increase in housing inventories. More inventory is good as it helps to balance the playing field, where it is neither a buyer’s or seller’s market – just a good old fashioned real estate market.

About Linda Urbick Linda

has written 244 articles on this blog.


Filed under: General RE Tips

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