16 Nov What is happening right now with mortgage interest rates
What is happening right now with mortgage interest rates
The October inflation report was just released this week and it is good news for buyers and sellers of real estate.
Consumer prices rose only 3.2 percent in the year through October. That number shows inflation is decelerating and shows encouraging signs of all factors like shelter, food, home energy, airline fares, used and new car prices, restaurant dining, hospital services and gasoline prices.
This was also very favorable news for the stock market as it jumped 1.8 percent because investor believe the Federal Reserve is done raising interest rates. The two-year Treasury yield, that is sensitive to changes in interest rates, also fell substantially.
The current thinking is that the Federal Reserve will do nothing with interest rates at the December 27th meeting and might begin to lower rates at the January meeting if these trends hold true.
This has already influenced interest rates as we had a high of 8 percent about three weeks ago and now, we are barely above 7 percent for a conventional loan and 6.5 percent for FHA/VA.
An interesting side note is that we are now seeing 100 percent mortgages and with sellers paid closing costs it is much easier for buyers to get into a new home.
It is a great time to buy now since we are not experiencing crazy prices with multiple offers on most homes so the buyer can more easily secure a house and then do an inexpensive refinance when rates go down. I look forward to next spring to be very busy again as rates will be a little longer and with our low inventory of homes and more buyers in the market we will be back to a seller’s market.
Look for more articles in the future on the state of Minnesota Real Estate. Let Jeff’s over 30 years of real estate make a difference for you!