I have said it once. In fact, I have said it more than twice. And now, I am saying told you so.
Just two days ago, mortgage interest rates were still under the 5% barrier at 4.875% for a 30 Year Fixed Rate Mortgage (FRM). Today, the dreams of owning a home with a mortgage loan at a 4%+ interest rate turned into a horrifying nightmare that those days are no more.
With new home sales seeing an increase of almost 3% nationwide, most of those sales coming from first-time home owners, lending institutions have begun to increase their rates in hopes that they can liquidate new mortgages more easily on the secondary mortgage market. With these higher rates, Mortgage Backed Securities (MBS) become a stronger financial investment for Wall Street.
As the previous ceiling of 5% becomes the new floor, future home owners and current home owners looking to refinance can expect a testing of the new ceiling in the upcoming months. What this means is that 5% will soon become a thing of the past, too. And mid-5% rates become the new floor and the ceiling testing the 6% interest rate range.
Even with interest rates climbing, lenders are keeping their qualifying guidelines in place. So future borrowers looking to purchase a new home will now qualify for less of a home. Add that with slowly increasing home prices, it is only a matter of time before the opportunity for many new home owners to own a home disappears much like the fog fades away and the city of Brigadoon is gone for another 100 years.
Hope is not all but gone, yet. Call us today to get your financing in place before your opportunity of home ownership starts knocking on someone else’s door.
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