2015 was the best year for the Housing Market since 2007, and 2016 looks even better. Well- for the market on the whole, even if for the buyer they might be locked into a rate a little bit higher than last year.
This is a classic case of bad news-good news.
Bad news, the mortgage rates will go up this year. Good news, there are houses to buy, especially affordable newer options. AND the rate will go up the most in neighborhoods with the highest home prices, so what’s a little more change to them?
Bad news, the mortgage rate is up a bit, but good news it’s still cheaper to get a mortgage than to rent at market-rate prices.
Bad news, the mortgage rate is up some, but good news home prices are down.
Bad news, with higher debt-income ratios credit scores go down. Click here to Get information about the magnitude of your options, despite that credit. Excellent news, it’s still possible to get a mortgage with lower credit scores, partly because the feds guided interest rates up.
The big dudes! The Federal Reserve, in case anyone needs a re-introduction, happened in 1903 after the panic of 1907 and imagined or impending financial crisis created a climate where centralized government assistance was desirable.
There are three main roles of the Feds
- Maximize employment
- stabilize prices
- moderate long-term interest rates.
In this delicate balance, there’s a sort of dance that happens. This year the employment has the leg up, with relatively stable prices then the interest rate will leg up as well and there is the real ladder we climb, ladies and gentlemen.
So what? that the basis mortgage points will go up about 60 points. Someone is winning, certainly. And in an economy there’s a trickle down effect. Wait for it….