Will Interest Rates Rise And How Will Affect Home Purchase

This Article On Will Interest Rates Rise And How Will Affect Home Purchase Was UPDATED On October 14th, 2018

Will Interest Rates Rise And How Will Affect Home Purchase

When it comes to the current housing market, no one can, without absolute certainty, predict the values of homes:

  • In many parts of the country such as many parts of California and Florida, home prices are skyrocketing and homes are selling the minute they become listed
  • However, nobody has a crystal ball on where home prices are going
  • Things that go up can easily come down and vice versa
  • What does the near future hold with home prices?
  • Are home prices going up, or are they going down?
  • While financial analysts and industry experts can forecast events by using past data, they cannot be certain of future outcomes
  • With that said, there is much speculation on what the Federal Reserve is going to do to interest rates in 2019
  • Interest rates are a great indicator of housing purchases

In this article, we will discuss and cover Will Interest Rates Rise And How Will Affect Home Purchase.

Brexit & The Election Of President Donald J. Trump & Interest Rates

Many potential home buyers are concerned whether will interest rates rise in 2019:

  • With Great Britain’s vote to leave the European Union on June 24, 2016, the notion of raising interest rates is unlikely

According to Freddie Mac, interest rates are likely to go up to at least 6% by the year 2020.

Will Interest Rates Rise In 2019 With Job Growth

It’s no secret that the US job market is tied to the housing market.

  • The Federal Reserve Board has indicated the fast job growth and the hot economy will definitely not slow them down in increasing interest rates

Additionally, the Federal Reserve does not historically raise interest rates right before an election but it seems like it will do prior to the 2018 mid elections.

So Should You Buy A House Now Or Later?

So Should You Buy A House Now Or Later?

Interest Rates has remained at historical lows for over half a decade and never in history has interest rates been as low as it has been for so long:

  • The Great Recession of 2008 crushed the housing market
  • Many homeowners who had equity in their homes and relied on that equity for their retirement saw their equity diminish literally overnight
  • Millions of homeowners saw their mortgage balances higher than the value of their homes
  • Some decided to bail on their homes because they could not sell their homes
  • Others whose mortgages were upside down
  • Many homeowners never ever dreamed that they would ever see the daylight of their home value ever-increasing
  • They took it for granted that they were stuck in their homes for the rest of their lives

Areas of Florida, California, and many other parts of the United States have seen the value of their properties plummet more than 50% in value.

Recovery Of The Housing Market And Shortage Of Housing

Fortunately, starting in 2010, the housing market slowly started to recover and by 2013, home values in many parts of the country such as Florida and California were skyrocketing by double digits every year:

  • Many potential home buyers were on the sidelines to see if interest rates will fall further
  • However, while waiting, home prices were appreciating
  • Many who were eyeing on a certain type of home have missed the opportunity to purchase that home

Many areas of Florida such as the following:

  • Miami-Dade County
  • Broward County
  • Palm Beach County
  • Homes are selling the minute the home is listed on these particular counties of Florida on the MLS

Will Interest Rates Rise Despite Rising Home Prices?

If you are going to buy a home, now is the time:

  • Interest rates are still reasonable
  • Market prices are still well below 2008 trends, prior to the bursting housing bubble

While inventory remains low, buyers are still in a great position to negotiate good terms on a home purchase.

About The Author Of Will Interest Rates Rise 

More about the author of interest rate increases

Alex Carlucci is a licensed loan officer with Gustan Cho Associates. Alex is a contributing associate editor and writer with Gustan Cho AssociatesAlex is armed with decades of accounting and finance knowledge.

  • Alex Carlucci has an MBA and a Master’s Degree in Accountancy
  • He has advanced knowledge of business taxation
  • Alex’s passion is helping others and being armed with her extensive accounting experience and being an expert in real estate and finance
  • Alex is a senior member with Gustan Cho Associates
  • He is a full-service mortgage banker specializing in FHA Loans, VA Loans, USDA Loans, Conventional Loans, FHA 203k Loans, Reverse Mortgages, Jumbo Mortgages, Non-Conforming Loans, and Commercial Loans
  • Alex’s specialty will be originating mortgage loans with no lender overlays.
  • Mr. Carlucci works for a five star national full Eagle Fannie, Freddie, Ginnie Mae Direct Lender licensed in multiple states
  • Gustan Cho Associates has no overlays and a policy to close loans in 21 days

If you have any mortgage lending questions and are considering a Home Purchase and like to go over case scenarios and know more about the area, feel free to contact Gustan Cho Associates at 262-716-8151 or text us for a faster response. Or email us at [email protected]

This BLOG On Will Interest Rates Rise Was UPDATED On October 14th, 2018

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