Interest Rates on the Rise

On December 16, 2010, in Uncategorized, by David Monsour

The real estate community has been spoiled by ridiculously low interest rates for the past 1.5-2 years. In an effort to stimulate a relatively stagnant real estate market the government made a few different efforts to promote home ownership. One such effort was the first time home buyer tax credit which was available in two different forms over a two year period. After the credit ended (great rates during the credit time) the rates dropped even further creating a real estate market that was the most affordable home buyers market for 40 years.

We all knew it was going to happen, it was just a question of when. Rates have started climbing and so far it hasn’t proven to be a slow one. In early December a buyer could get a rate of 4.25% without paying any discount points. As of today 12/16/10 the rates are about 5%. Of course rates will vary from person to person depending on credit score.

The point I want to make is that rates are climbing. We don’t know how high they might go or if they’ll drop as we head into 2011. That being said if you’re considering a home purchase in the near future it might be the right time to get into the action mode. 1% increase in rates will greatly reduce your buying power so act now.

 

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