Time to Take Interest in Interest Rates

Posted by: admin  :  Category: Financing, Market Trends

Why all this recent interest in interest?

Interest rates affect the housing market and they are changing. Both indicators and experts suggest they will slowly continue to climb.
In mid September, however, interest rates took a slight dip, back to 4.5%, from 4.57%. Still, this is up from May of this year, when rates were in the 3-percentage range.

The change in interest from January to mid-September translated to an extra $132 a month in payments on a $200,000 30-year loan. Source: Freddie Mac via money.cnn.com

This difference of more than one percentage point is somewhat drastic in the interest rate world. The general consensus, based on talk from the Fed, is that nothing else drastic should be expected this year (with interest rates anyway).

Instead, talk is shifting to gradual rate increases and comparisons to somewhat recent history or “normal times.”

“Despite recent increases, rates are still low by historical standards. During the housing boom years, they typically ranged between 6% and 7%,” – Frank Nothaft, Freddie Mac’s Chief Economist

Freddie Mac’s chief economist, Frank Nothaft told CNN Money he expected rates “to hit about 5% by mid-2014. That’s an increase of less than $24 a month for every $100,000 borrowed – enough to weed out borrowers who are struggling to afford homes but not enough to impact overall demand,” according to CNN Money.

If you find this interesting, and would like a digest email of my monthly blog headlines to hit your in box, please sign up at the top left of FosterBoise.com. If you’d like to receive real-time MLS listings for a certain area, price or housing type, shoot me an email. In the meantime, stay tuned for next month’s follow-up article on interest. It will delve deeper into the topic.

Sincerely,
Providing you real estate market trends
ShanaFosterMoore@gmail.com
Your Local Boise Real Estate Professional

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