Interest Rates Show Little Movement

Interest Rates Flat After Last Week’s Big Jump

Interest rates stabilized this week after last week’s big jump that brought up above 4% to the highest levels we had seen in over 4 months. There was little change this week with little movement in rates and we will have to wait to see if downward pressure will pull them back down below this historic level or if higher rates that could have a major effect on the South Florida real estate market are heading our way.

As of this morning, the average overnight rate for a fixed 30-year mortgage as reported by Bankrate.com is at 4.03% unchanged from where we stood one week ago today. The benchmark 15 year fixed rate is at 3.24% down 2 basis points from last weeks level while the benchmark 5/1 adjustable rate mortgage increased slightly to 2.89% from 2.88%. Interest rates, along with the GDP and the unemployment rate are the most important factors affecting the real estate market throughout the country and while some think a spike in rates may help spur some buyers there are concerns.

Not only is an increase in rates facing buyers but so are new changes to upfront mortgage insurance fees on FHA mortgages which are going down for those who are refinancing but jumping 70% for those who are purchasing a new home. As of June 11th that fee will jump from 1% to 1.7% so if a buyer is borrowing $300,000 from the FHA their closing costs will jump an additional $2,100. But the FHA is kind so buyers can, if they choose lump the upfront mortgage premium into their loan and pay that off over 30 years as well.

So this week watch closely to the economic news and where rates from here. If we continue to see improvement in GDP, unemployment and other factors rates should jump higher and while a slight jump may in fact spur buyers there are few homes for them to purchase. Potential price increases are on the way if not already here add that in with higher rates and we could see these things put a damper on the recent improvements. While everyone acknowledges that housing usually leads us out of difficult economic times this time it may be different indeed.

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

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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…..by 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 tom@paradisesharks.com. You can always pay more and receive less but that just would not make any sense. Would it?

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