The 30-year fixed-rate mortgage rose by just over a quarter of a percent recently to around 4 percent. That’s the largest one-week increase in over three years. What does that mean for home buyers? Will interest rates continue to rise in 2017?
Even though the rate hike has many home shoppers hitting the pause button on signing up for a new home mortgage, it’s important to remember that the rates are still at an historic low. In case you’re a Millennial and don’t remember interest rates above 7 or 8 percent, the rates in the 1980’s were in the teens. Although they’ve been historically low for the last six years, you have to go back 60 years or more to find interest rates below five percent before 2010. I got my first mortgage in 1992 and was thrilled to get 9.9 percent on a fixed rate loan. I would have killed for 4 percent.
Will interest rates continue to rise in 2017? The most likely answer is yes, but that’s not necessarily a bad sign. Generally speaking when the economy is strong the interest rates go higher, and when times are economically tough, the Fed lowers the rate in order to make it easier for consumers and businesses to borrow and spend, which pumps more money into the economy to help it recover.
So, if you are considering buying a new home in 2017, should you buy or should you wait? Most mortgage advisors would recommend locking in your rate as soon as possible to get the best rate. It’s important to remember that your credit score is probably a much larger determining factor in what rate you might pay when getting a mortgage than the benchmark interest rate at this point. So, make sure to manage your credit rating and don’t make any large purchases on your credit cards or buy a new car anytime soon if you plan on buying a house this year.
McKee Homes works with a few mortgage companies which we refer to as our preferred lenders. These companies all provide excellent customer service and are going to give our homebuyers the best rates so they get a mortgage that works for them. We continue to see very positive survey reviews from our homebuyers in regards to our preferred lenders. In fact we pay all closing costs when buyers use one of our preferred lenders, and to lighten the sting of the interest rate hike, we are even giving our homebuyers free blinds and an upgraded refrigerator on all homes that are currently under construction or move-in ready until March 31, 2017.
For more information on our preferred lenders and our buyer incentives, please visit our Buyer Incentives web page or give us a call at 910-672-7296.