That seems to be the question on the minds of all my buyers lately. Rates are “soaring” as one mortgage executive recently wrote in his blog. TAKE A DEEP BREATH- rates are still near all time lows and buying a house is still a great investment. The reason for the recent rise in rates seems to be a few different things. But most agree that concern over Fannie and Freddie Mac which own or back over 50% of the the mortgage market has fueled the recent rise, at least in part. Bond investors are worried that these GSEs (Gov’t Sponsored Entities) may not be as big a support to the market as they have been and are driving up interest rates on securities backed by home loans. That added cost is being passed on to consumers. Lawmakers just today announced a deal on a housing package meant to help bolster Freddie and Fannie and hopefully bring more stability to that area of the market.
Even with rising interst rates, it is important to take historical perspective.
So where are rates today you ask? As of this morning, 7/22, the current 30-year fixed conforming rate is 6.875% and the 30-year FHA is 7.0%, with JUMBO loans at 8.50%. These numbers are based on a $150,000 loan and an 80% LTV.
If you are wondering what all these numbers mean to you or what your purhcasing power is? Give me a call and I’d be happy to help you get started!