Due to the recent increase in mortgage interest rates, Orange County Realtors and market speculators have been wondering what, if any impact this activity might have on the recovery of the housing market.
Cause for Concern?
Although there is widespread concern across the United States among Realtors, Mortgage industry professionals and Economists; there are plenty of top Financial Analysts including Mark Palim, Fannie Mae’s VP of Economic Research, who recently put fears to ease regarding the effect of Mortgage Interest Rate increases on the market by stating that current rate increases aren’t going to stop any progress that the housing market has made in the last year.
Behind The Numbers
Palim’s recent comments reflect the economic outlook of many economists across the country who feel that when Mortgage Interest Rates rise quickly, the rapid rise will ultimately decrease the average purchase volume of homes while increasing the adjustable-rate mortgage market share.
30-Year Mortgage Statistics
Over the last nine weeks, the average 30-year, fixed rate, mortgage interest rate has sky rocketed upward by way of 116 basis points from 3.35 percent to 4.51 percent by the middle of July.
Even though the rapid increase in Mortgage Interest Rates has been shocking recently, this type of increase has happened in the past. Back in October of 1993, and December of 1994, Mortgage Interest Rates increased by 237 BPS all the way to 9.20 percent.
Over the last year, homeowners have been reminded of the wild wild west as home prices have increased so quickly that homeowners who were once underwater with their home have been able to recoup equity in their home and even sell their homes at a profit. This was recently the case for one of our clients who approached us to Short Sell his home. Not only were we able to avoid a Short Sale, he as able to walk away from the home with several thousand in his pocket and save his credit!
To learn more about the latest industry news, or to view the latest Orange County homes for sale, contact Fred Sed & Associates today at (949) 272-0125.