If you know anything about the housing market, you know that the interest rates on mortgages are a critical indicator of how the housing market is behaving. It looks like there is good news in both the near, and immediate, future. After reaching their highest point in 8 years, the interest rates for home loans have finally taken a break from their rampant growth.
The thirty-year fixed-rate mortgage (“FRM”) held steady at 4.94%; the fifteen-year FRM increased to roughly 4.36%; and the five-year Treasury-indexed hybrid remained at 4.14% over the week of November 15, 2018.
However, the fear that the housing market is becoming stagnant has been voiced by many investors who track the market. According to a survey by the National Association of Home Builders, fewer Americans expect they will become homeowners in the immediate future, and more homeowners are remaining in their homes for longer periods of time.
Another troubling fact facing the housing market at this point in time is that a significant number of older homeowners currently have mortgage debt; approximately 41% of home owners over the age of 65 in 2016 – this represents a 20% increase from 1989. However, the lack of an increase in the interest rates for FRMs represents good news in a market that has consistently received bad news over the last few years – the lower the interest rates on mortgages, the more people that can afford homes. The more people that can afford homes, the higher demand for homes on the market. Further, higher demand for homes on the market is likely to encourage homeowners who were holding onto their real property out of fear of a shaky market may be encouraged to put their homes up for sale once they see life being breathed back into the market.
At the Chernov Team, we take pride on keeping our thumb on the pulse of the housing market, both locally and nationally, and are happy to say that economic indicators are looking up for the housing market. At the Chernov Team we understand that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.
