Interest Rates are on the Rise – No Joke This Time!

In an unprecedented and unexpected win, Donald Trump becomes the 45th president of the United States after most polls and various political sites had him losing the election to Hillary Clinton. Mr. Trump, who has never held a public office, will now take on the daunting task of steering the U.S. economy into greener pastures.

The results of the election sent shock waves throughout the global financial markets. Late Tuesday night, the Dow Jones Industrial stock futures were implying that the index would open lower by 800 points on Wednesday morning. However, the U.S. Stock markets are trading higher this morning as volatility takes center stage.

The Mortgage Bankers Association (MBA) reports that mortgage rates edged higher in the latest week and have trended higher for the past five weeks.

  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to its highest level since June 2016, at 3.77% from 3.75%.
  • The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) also increased to its highest level since June 2016, at 3.75% from 3.74%.
  • The MBA also reported that mortgage application volume slid 1.2% last week.

What does that mean for our local real estate market? Things are going to shift, and fast we believe. We are already seeing a slow down to the 2016 super hot sellers market. Sellers that want to get top dollar for their homes should strike while the iron is hot and make their moves now.

On the flip side, buyers that have grown used to 40 year low interest rates should also heed warning. Rates are already heading up and are predicted to keep heading north. As this happens, buying power will decrease for these buyers, especially affecting first time home buyers.

What should you do if you have been considering a move? Call us today. We can educate you further on why you are in a unique situation to sell your home for top dollar and win on the buy side too! #TheKeyTeam 919.351.5065