Over a month ago, way back in November, when the Federal Reserve announced plans for the $600 Billion QE2 program the chairman of that organization told us how the program would lower interest rates. Since that announcement, rates have done exactly the opposite, soaring up from 4.21% on November 7th up to the 4.87% where we sit today. This is the 9th increase in rates over the past 14 weeks and that falls directly on the heels of rates falling 19 times over a 21 week period.
The benchmark 15 year fixed rate also increased significantly last week to 4.24% from 4.07% while the benchmark 5/1 adjustable rate mortgage moved to the upside to 3.53% from 3.46% the previous week. Yesterday, I had the opportunity to discuss the recent movement in Treasuries with a few people who understand those markets better than I and posed the question where they thought rates were going. The consensus I got was a continued trend to the upside through the end of the year; maybe an additional 20 to 30 basis points through with some downward pressure after the new year. Looking a year out they all seemed to feel we would be up about a point+/- from where we stand today.
Rates today are still historically low and I would doubt that movement up to 6% will have any drastic effect on the real estate market but locking in today makes sense on a number of fronts. The Fed’s latest plan to hold down interest rates has certainly not worked and I think the possibility of rates higher than 6% a year from now certainly are not beyond the realm of possibility.
A professional real estate agent watches these market trends very closely as the data is very important to our clients, whether they are buying or selling, to paint a picture of where the market may be heading. If you would like any additional information on a specific home, neighborhood, or community please feel free to contact me. I am easily reached at 561 308-0175 or via e-mail at email@example.com and would be happy to be of assistance. After just one call you will know why “Results Driven Real Estate” is your top choice for professional real estate services in Palm Beach and Martin Counties.
Always at Your Service,
Tom Priester e-PRO
”Results Driven Real Estate”
Keller Williams Realty