Interest rates won’t stay this low forever. They’re currently at historic lows, but they’re beginning to increase again. Rising mortgage interest rates make buying and selling more difficult. Higher interest rates lead to less affordability for buyers due to larger mortgage payments.
A change occurred in mid-March when Fannie Mae and Freddie Mac (aka the GSE, the government-sponsored enterprises which control the conventional loan market) announced that they will be limiting loan originations down to 7% for investment and secondary homes, which is half the historic level. That means most lenders have or will increase rates or fees to limit originations so they can be sure that the ones they have will be picked up in the secondary market. Therefore, we’ll start to see more cash buyers for these types of transactions. Also, the 10-Year Treasury has doubled in the last few months, and mortgage rates are tied to that.
This all boils down to the fact that interest rates won’t stay this low for much longer, so take advantage while you can. If you or anyone you know is looking to purchase a home in this market, please feel free to reach out via phone or email. Our team of seasoned experts is here to help you through the process.
