With Little Building Going On, Homeowners With Equity Can Sell Fast and High
NEW YORK (TheStreet) -- Thirty-year fixed mortgage rates are down a bit this week, to just under 4.70%, according to the BankingMyWay Weekly Mortgage Rate Tracker, but the long-term mortgage trend is on the upside, and it could be just a matter of time before average 30-year rates rise to 5%.
Indeed, some mortgage brokers tell BankingMyWay they're already seeing regular rates north of the 5% mark, which should raise eyebrows for both homebuyers and sellers.
The National Association of Realtors says higher rate are the primary reason home sales have slowed lately. Its monthly Pending Home Sales Index says the 1.3% decline in U.S. residential home deals in July were "because of higher mortgage rates slowing the market."
That's particularly true in the U.S. Northeast and West, where home prices are growing, the NAR reports.
"The modest decline in sales is not yet concerning, and contract activity remains elevated, with the South and Midwest showing no measurable slowdown," says Lawrence Yun, chief economist at the NAR. "However, higher mortgage interest rates and rising home prices are impacting monthly contract activity in the high-cost regions of the Northeast and the West."
"More homes clearly need to be built in the West to relieve price pressure, or the region could soon face pronounced affordability problems," he says.
Other real estate professionals agree, noting that whether you're a buyer or a seller, now may be time to get into the market.
"Homebuyers shouldn't let this year's increase in interest rates drive them out of the market," says Rick Allen, chief financial officer at MortgageMarvel.com, a mortgage shopping marketplace. "Rates on a 30-year fixed mortgage are around 4.5% with zero points down right now. This is close to where they were roughly two years ago, and at that time, people were thrilled with the rates. No one knows the direction of rates for sure, but today's rates remain very favorable for mortgage refinancing."