It has definitely been a brutal month for those watching mortgage interest rates. With the economy moving along and the Federal Reserve talking about when they might stop their quanitative easing program, interest rates have been jumping quickly!
About a month ago, we had mortgage rates in the mid 3's depending on your situation and the loan program you were using. Now those rates are in the mid 4's. It didn't take long for interest rates to jump. This week there were a couple days were the bond market gave a little back to us, but don't expect to see very much of that in the near future.
This week the Commerce Department released the final report on the economic growth of the first quarter of 2013 and numbers were actually down in all areas except home construction and government. This report is casting a shadow over the Federal Reserve's upbeat economic report from last week. Many credit market participants think that this report will delay the Federal Reserve's withdrawal from purchasing mortgage market securities and Treasury debt obligations – which may help to slightly lower interest rates – or keep them from going much higher quickly.
The reality is we are seeing interest rates increase and if you are in the process of buying a home, you need to make sure you are talking to your loan officer to make sure you can still qualify. I had this conversation yesterday with a buyer as the higher interest rates affected her qualifying. She could still buy a home, but had to lower the maximum she could spend.
As home prices are also starting to climb, you want to make sure you know what you can buy. Talk to your realtor and your loan officer and make sure you know what you can afford. We don't know how high and how fast interest rates will move, but you do want to be prepared.
Leslie Vanderwerf, NMLS ID#335509, American Mortgage & Equity Consultants – Email – Website
