A letter from John Inzeo, Vice President, Wisconsin Mortgage Corporation
While most people’s minds are on school starting and fall weather approaching, remember that we have months left in the home buying season before saying goodbye to 2013. Acting now may be the best move you ever made.
About a month ago, the 30-year Fixed Rate Mortgage (FRM) increased to almost 5%, which may have scared off some buyers. The market was overreacting to comments made by Federal Reserve Chairman Bernanke related to monetary policy and the future. Since then, the market has settled down and rates have been holding at about 4.375%. There was never a cause for panic — the sky was not falling, and rates were doing exactly what we thought they would do: go up! Even at 5%, rates would be at historical lows when compared with the average since 1972 (almost 9%). These rates prove that the current economic situation is all about buying power.
Rates will always go up and down for a variety of reasons. The difference today is that we expect rates to adjust up as the Federal Reserve’s monetary policy changes take place in the coming year. These increases won’t be dramatic, but they will signal an end to the historic lows we have enjoyed since 2009. It’s likely that rates could be near 6% by the end of 2014. This is still very low when compared to the 40-year average but an increase that could affect how much home you can afford. My advice is to act now —before rates go up, prices continue to climb and homes you love get sold. Get in the game and get settled in that new home before the holidays are here.
Your best plan of action is to meet with a loan officer at Wisconsin Mortgage Corporation. We’re a quality lender who will help you achieve your homeownership goals before rates and home prices continue to rise.