How The Recent Rise In Mortgage Interest Rates Impacts The Tallahassee Real Estate Market
Mortgage interest rates have jumped following the US Presidential election, a result that is not surprising to most of us.
And second only to a major change in our local jobs market, a move in interest rates causes us to wonder about the impact on the Tallahassee real estate market.
I pulled the graph above off of Bloomberg this morning, and it shows that "the yield on the U.S. 10-year note -- a bellwether of changes in mortgage rates -- has jumped more than 35 basis points since the Nov. 8 presidential election, the biggest three-day increase since 2009."
Sounds pretty scary, right?
Gain Perspective With Long Term Trend Analysis
Recently, I was asked the following question:
"As you predicted, interests rates just made a move. Would you give us an idea of what the recent rise in interest rates means for the Tallahassee market equilibrium?"
First of all, EVERYONE predicted a rise in mortgage interest rates. It wasn't hard to do, as rates were at the very lowest point in recorded history. In other words, when you are seeing a market extreme, you should anticipate eventual movement in the other direction.
The following graph comes from the information that we give all buyers when counseling them on their options when borrowing money to buy a home. It shows just how low rates are now versus where they've been in the past.
Simply put, it shows that current mortgage interest rates remain VERY NEAR HISTORIC LOWS.
In fact, post election mortgage interest rates rose from 3.69% to 3.73% ... a level that is inconsequential to the balance of supply and demand of homes in the Tallahassee real estate market. This change in rates represents a $4.53 difference in the monthly payment for somebody who borrowed $200,000.
What To Expect Rates To Do From Here
Who knows. Seriously. My best guestimate is that they have to rise, as we remain very near record lows. But the reality is that mortgage interest rates are tied to the bond market and I don't really study the bond market. And the people that do have conflicting reasons and stories as to the future of mortgage interest rates.
So what do you do?
Not sure where to start with the pre-qualification process?
Simply tell us who you are and a trusted local mortgage lender will be in touch to answer all of your questions.
If you are in the process of buying a home, locking in rates will allow you to sleep at night knowing any crazy short-term changes will not hurt you. You might miss-out if they fall, but how far do you really think they could fall? The risk/reward says "lock."
If you are wanting to move but haven't started the process, you should seriously give it "front of the line" space in your head. Sit down with one of our home buyer specialists and with our listing team if you have a home to sell and give yourself an understanding of where you stand.
If you choose to stay in your home, I recommend you speak with a mortgage banker about a refinance so you can lock into historically low mortgage interest rates.
If you choose to move, you'll be able to take advantage of these low rates before they are lost to history.
Regardless of your decision, now is a smart time to assemble and consider all of your options so that you make the best decision for you and your family. Let us know if we can help!