Inflation is a key indicator for where Mortgage Interest Rates are headed. In simple terms, when prices of goods and services go up, investors of mortgage backed securities lose return. That is why when prices rise, so too do interest rates. With the recent jumps in interest rates many projected a steady increase. While I’m not a prognosticator of interest rates, all signs look like they will remain at or near their current levels.
Inventory is getting better. After three consecutive months, pending home sales reversed course in all major regions of the United States with the exception of the Midwest. Almost all regions saw an increase in contract activity according to the National Association of Realtors®.
How about some more good news? As I’m writing this blog the Dow Jones Industrial average hit a record high, approaching the 40,000 mark; powered largely by Goldman Sachs, JP Morgan Chase and a few others.
The economy certainly is showing signs of legitimate growth built on the right foundation.
If you are considering a real estate purchase or are considering getting a mortgage, now is a very good time to act. Historically, rates average around 7-7.5% overall. If you purchase today at today’s costs and property values go up, you can always refinance when rates dip again.