Is the Sub 4% Interest Rate Party Over for Good?

Interest Rates Jump to 17 Week High

After an amazing 14 week run where interest rates stayed below 4% things changed last week. And that change was indeed significant. We had become complacent about what truly is the best time we will probably ever see to lock up long term mortgages. Well that slumber was jolted by an alarm clock last week and now we have to see if the Fed’s actions will be enough to make the snooze button operate. And if so, for how long.

As of this morning, the average overnight rate for a fixed 30-year mortgage as reported by is at 4.03% up 15 basis points from where we stood seven days ago. The benchmark 15 year fixed rate is at 3.26% up 11 basis points from last weeks level while the benchmark 5/1 adjustable rate mortgage jumped to 2.88% from 2.75%. The chart above shows just how significant that jump was and we may look back on sub 4% rates as the “good old days”. The weeks jump was the largest we have seen in well over a year and brought us above the magic 4% number.

Some economists point to better economic data causing the jump while others point to the continuing fear of inflation. Whatever the reason we can hope the Fed is able to keep rates down as they truly are the lifeblood of the continuation of the Palm Beach County real estate recovery. Buyers and sellers remain in a stare down over prices as inventory levels have dried up in many market segments. Buyers remain price motivated while sellers with less competition feel there properties are worth more. Rising interest rates could end up costing them both.

Buyers who have been riding the fence thinking prices may go lower are playing a game of chance with interest rates. Thursday I sat with a client in a closing who bought a home they should be able to happily stay in for 15 years and secured a fixed 3.75% rate . I sat there so happy for them knowing they are a lucky couple with 2 small children who just closed on a deal that really was a “once in a lifetime” deal.

Hoping rates under 4% return this week but not confident. They may in fact be gone for good…………


Published by

Tom Priester

After spending years among the top individual performers at one of Palm Beach County’s largest and most successful real estate brokerages, Tom Priester knew there was another way to do real estate. A better way. Real estate services focused on the customer. Like the old days when the customer truly was #1. He tired of listening to why he should be going out to have his customers sign one sided buyers’ brokerage agreements. He tired of hearing how he should be selling customers why paying higher commissions, like 7% and 8%, was to their benefit. He tired of hearing how he should sell his clients on why they should be paying hundreds of dollars in additional “transaction fees”. The business had slid way too far from being focused on the customer. His customer. So he decided the time was right to be different… design. To start his own unique boutique real estate firm truly focused on his customers. They will now have access to a process focused on them. Only the best marketing techniques to sell their homes. No cutting corners. Commission structures based on his clients needs not his. Paradise Sharks was born out of Tom’s passion to return this business to the customer. Where it belongs. If you want a real estate experience that benefits you, just give Tom a call at 561 308-0175 or send him an e-mail at You can always pay more and receive less but that just would not make any sense. Would it?

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