{"id":5811,"date":"2017-03-13T16:41:20","date_gmt":"2017-03-13T20:41:20","guid":{"rendered":"http:\/\/teammovemortgage.com\/?p=5811"},"modified":"2020-07-13T22:32:47","modified_gmt":"2020-07-13T22:32:47","slug":"mortgage-rates-trend","status":"publish","type":"post","link":"https:\/\/teammovemortgage.com\/blog\/mortgage-rates-trend\/","title":{"rendered":"Mortgage Rates Trend and an Improving Economy – How it Impacts You"},"content":{"rendered":"

It has started.\u00a0 You hear the buzz everywhere talking about the future of\u00a0interest rates, economy, and real estate market<\/a>.\u00a0 How many times will the Fed raise rates this year?\u00a0 Should I lock in a mortgage rate now?\u00a0 How is the job market<\/a> doing?\u00a0 Are housing prices<\/a> going up?\u00a0 No one has a crystal ball no matter how much one claims to know.\u00a0 But let’s discuss the mortgage rates trend and how it affects buyers, sellers, realtors, and more.<\/p>\n

Actually interest rate increases are a key indicator that the U.S. economy<\/a> is improving.\u00a0 Actually, low interest rates reflect a struggling economy.\u00a0 For the last 10 years, the great recession and stimulus packages from the government have given us a rare period in history.\u00a0 These rates are unprecedented.\u00a0 So even though rates have been extremely low for so long, they need to go up.\u00a0 Increasing rates is a good sign and we will explain this further.<\/p>\n

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Jobs Report and Confidence Affect on Mortgage Rates Trend<\/h2>\n

As mentioned, higher rates means a more robust economy.\u00a0 There are many factors that influence mortgage interest rates.\u00a0 Factors include stock<\/a> & bond<\/a> market, inflation, consumer confidence, world & U.S. fears, and jobs.\u00a0 So market fears such as low confidence, bad jobs reports, or low inflation\u00a0lowers rates.\u00a0 But a jobs report like the January and February 2017 numbers typically pushes the mortgage rates trend higher.\u00a0 Each month showed 238,000 and 235,000 new jobs respectively.\u00a0 Construction and manufacturing jobs led the way.\u00a0 The FOMC<\/a> (or Fed)\u00a0will decide whether to raise the federal funds rate this week.\u00a0 So strong jobs reports such as these will undoubtedly influence rates upward.\u00a0 Check out\u00a0a prior\u00a0article that explains why a fed rate increase will not always raise long term mortgage rates<\/em><\/a>.<\/p>\n

\u00a0<\/strong>Also it is easy to tell that local through federal level leaders are pushing for a better economy.\u00a0 Basically they want more jobs.\u00a0 There is a lot of talk of tax cuts for businesses on the horizon.\u00a0 Additionally healthcare<\/a> changes are being discussed to hopefully lower Americans’ premiums and out of pocket costs.\u00a0 Successes in these and other areas should increase jobs.\u00a0 More jobs and higher pay means more consumer confidence.\u00a0 So more confidence is a good thing for the economy and the real estate market.\u00a0 Although this does mean higher mortgage interest rates.<\/p>\n

Mortgage Rates Trend Affect on Real Estate<\/h2>\n

Will mortgage rates keep rising?\u00a0 Are housing prices increasing?\u00a0 It is decidedly so!\u00a0 And that isn’t just the chance answer of the magic 8 ball!\u00a0 Obviously higher real estate prices benefits owners and sellers.\u00a0 If a homeowner decides to sell, there are greater profits to realize.\u00a0 These profits could be used for down payment on a new house, pay off debts, or pay for kid’s college<\/a>.\u00a0 Currently the IRS<\/a> has beneficial rules for owners selling a home and potentially not having to pay capital gains taxes on the profit.\u00a0 But this also means a seller would now be a buyer and would pay a potentially higher price on the new home.<\/p>\n

First Time Buyers<\/h4>\n

Rising prices and rates will also affect first time buyers.\u00a0 As entry level home prices increase, less first time buyers can afford a home.\u00a0 But home prices and rates are not the only factors with today’s millennial buyers.\u00a0 Student loan debt <\/a>prevents many millennials from buying.\u00a0 Although there are little known, great financing solutions in these cases.\u00a0\u00a0These\u00a0mortgage programs\u00a0are flexible when it comes to student loans<\/a>.\u00a0 So even though the mortgage rates trend 2017 seems to be going up, there is great opportunity.\u00a0 Homeownership creates wealth.\u00a0 Equity beats renting most of the time.<\/p>\n

Relocation Buyers<\/h4>\n

There are a lot of buyers from the northeast US taking advantage of selling their appreciated home.\u00a0 Then northern sellers relocate to states like Virginia, North Carolina<\/a>, or South Carolina<\/a>.\u00a0 Many of these buyers either have a job relocation or retire to the south.\u00a0 Because home values are usually more expensive up north, they are able to have larger down payments here.\u00a0 Seniors are often able to use this equity along with a reverse mortgage<\/a> to buy an affordable home.\u00a0 Other relocating buyers include service members.\u00a0 Appreciating homes allow veterans to sell and hopefully cover their mortgage balance.\u00a0 Then VA eligible buyers may buy another home using a VA home loan<\/a>.<\/p>\n

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Benefits of Homeownership & Equity<\/h4>\n

Many of our local real estate markets<\/a> are actually doing so well that there is a limited amount of inventory.\u00a0 Therefore this is another factor that assists owners and sellers.\u00a0 It is a sellers market so buyers must be ready to jump on the right properties.\u00a0 But even buyers could also benefit from this future growth.\u00a0 Building equity not only creates wealth, it creates opportunity.\u00a0 Opportunities are benefits that include:<\/p>\n